The festivities will officially kick off on December 2 with the first of two night markets in Burke Square, which will feature stall holders and food vendors.  The second night market will be held on December 22.

Now titled the more friendly ‘Christmas Elves’, group member Rae Pfeiffer said she was amazed by how the community had thrown their support behind the group since its initial tinsel drive in 2014.

“Sue (Waters) drove into town (in 2014) and thought it was horrible so she got onto me and we put it on Facebook and we got donations,” Ms Pfeiffer said.  “People just rallied and it was amazing.”

While the Hepburn Shire will contribute to decorating the town, the Christmas Elves will again seek donations of tinsel from the Daylesford community. 

An evening of Christmas-themed entertainment on December 9 is also in the pipeline as part of the town’s festivities, while shops throughout Daylesford will be given a late-night trading license for each Friday in December. 

Ms Pfeiffer said the group had formed a close working relationship with council in the recent months, and would announce more Christmas activities in Daylesford in the coming weeks.

“Council have been fantastic.  Whatever we've thrown at them they've been up for it and said yes,” Ms Pfeiffer said.  “With the market we're going to have a lot of tourists in town on the weekend, so the dates are going to work really well.”

As well as livening-up the Daylesford region, other major towns throughout the shire such as Creswick, Clunes and Trentham have also received a festive facelift in time for Christmas.  

Hepburn Shire chief executive Aaron van Egmond said it was good to see council and businesses working together. 

"Last year Council made a commitment to work with the community and businesses to make the shire's main towns look more festive and appealing, for both resident and visitors," Mr van Egmond said.