The Federal Government has funded a $73,000 study into the feasibility of linking Ballarat's major tourist attractions through a tram system.

Ballarat ran a 20km urban tram system until 1971 when a drop in patronage and a high upgrade bill closed it down.

Ballarat Tourism and the City of Ballarat have called for the revival of trams for the past few years.

Ballarat MHR Michael Ronaldson hoped the feasibility study would prove the initiative would create jobs and boost the tourism industry.

``The initiative aims to strengthen the economic, employment and social returns from the tourism industry to the community,'' Mr Ronaldson said.

The Central Highlands Area Consultative Committee, which promoted this project for the funding, believes this could deliver significant tourism jobs to the region.

``The main issue is getting people between the main tourist points in a way that is convenient, cheaper and fun,'' ACC chairman Eugene Kneebone said.

``This study will look at the best way to do this.''

The study will consider a tram route, capital expenditure needed, running costs and technical issues.

It is expected to be complete by the end of this year.

Ballarat Tourism executive director Dianne Smith said a tram service would reflect the region's history and help move tourists to different attractions in the region.

It has pushed for action on these issues for several years. ``We want to see employment outcomes and good business opportunities and something that is another attraction for Ballarat,'' she said.