The announcement was made pre-lockdown on Thursday, May 27, with Regional Development Minister Mary-Anne Thomas on site to break the good news.
Stage two will see the region's first sensory garden built, which will reflect on the area's landscapes and indigenous flora, plus a welcome gateway, water feature and lookout.
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Girgarre Development Group president Jan Smith said the money was an example of the town's forward thinking dating back many years.
“Our dreams were small to start but these saw our renowned market and music festival begin our transformational journey,” she said.
“We as a community also understand that to create a sustainable future we have to be prepared to be financially responsible.
“Our sound shell is a place for performance and our nursery nearing the end of construction are two of the social enterprises that will fuel our future.
“We could not be more excited for our next chapter in the Girgarre story.”
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Ms Thomas said Girgarre might be a small community but it had a "big heart and bold ambitions".
“When I see the ambition you have for your community and for this very special place, that is something you should be extraordinarily proud of,” she said.
“To have the vision that you have to create what will be an incredible place for locals . . . but your plans will enable you to attract more people to the region; both to visit but also understand the many attractions of life in rural Victoria.”
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Project convenor Doc McDonald said the local community had heavily invested "financially, emotionally, and physically" in the project over the past nine years.
“It will change the town — there's no doubt about that,” he said.
“The wider benefits will be felt through the Campaspe Shire and wider region.”
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The new funding is in addition to two previous $50,000 grants from the Stronger Regional Communities Plan that allowed stage one to start.
It developed the Green Thumbs Community Nursery, which will initially be run by volunteers.
