Patricia Ann Gay, 55, was last seen by her daughter on Sunday, March 11, 2012, at her Malmsbury property about 100 kilometres north-west of Melbourne.

Homicide squad detectives confirmed a property owner found the human remains on land near Back Creek in Malmsbury recently.

"Following initial examinations, sadly, we believe the remains belong to Patricia Ann Gay," Detective Senior Sergeant Shane O'Connell said.

He said detectives would conduct a line search of the area on Tuesday morning in a bid to uncover further evidence or further human remains.

A $100,000 reward remains on offer for any information that leads to the conviction of any person involved in Ms Gay's possible murder.

Police have suspected a local had information about the murder of the mother of five and grandmother of 13.

The remains were found in undergrowth near Back Creek, and preliminary forensic testing confirmed they belong to a middle-aged Caucasian woman.

Detective Senior Sergeant O'Connell said Ms Gay had only been in Malmsbury a few days before she went missing from the Duffy Street home. It is believed she arrived two days before being reported missing.

He said the family were feeling "a mixture of relief and devastation, as you can imagine".

The remains were found in an area of about 20 square metres, with police now searching a 500 metre by 100 metre area.

Police were investigating whether more than one person was involved in the murder.

The homicide squad took over the investigation shortly after Ms Gay's disappearance, and an area of the property near Back Creek had been searched at the time.

The creek, which is almost dry but overgrown because of past floods, sits at the foot of hills west of Malmsbury.

There was no access to the creek from the rear of the property where Ms Gay was last seen, but the property is upstream from the creek. Police plan to study the flow patterns of the creek during flood to gauge where the remains may have been washed from.

Detective Senior Sergeant O'Connell said Ms Gay had a good relationship with her adult children. Family members had moved from Malmsbury since the disappearance.

"I'm confident there are people out there that know more," he said.  "We need the community's assistance."

Ms Gay's family spoke outside Broadmeadows police station on Tuesday afternoon. Her son Brett Churchill said the door to the Malmsbury home where Ms Gay was last seen had been ajar and the book she had been reading was open.

He said, after two-and-a-half years without a trace, that he had little hope she would be found alive.

"Knowing her, I knew she wouldn't have left us this long without any trace."

Ms Gay's daughter Brooke James said her mother was a funny and caring person with a beautiful nature who would do anything for anybody.

She had no enemies, and had decided to move from Broadmeadows to Malmsbury for a change of scenery only days before she vanished.

While her poor health was not the reason for the move, Ms James said Ms Gay's asthma was so bad she would have struggled to make it down the steps of the Malmsbury house by herself.

"It's a nightmare to wake up every morning and wonder what's happened to her, where is she. To finally have this news, it's good to know where she is but we still don't know what's happened to her.

"I'd probably give just about anything to know what happened to her.

"It's horrible, you see her face every time you close your eyes to try and go to sleep, you wonder what's happened, did she suffer, what was running through her head when it was happening."

The family were told of the discovery on Monday and will plan a funeral for Ms Gay.

Ms Gay's family held a memorial for her in Malmsbury last year to mark the anniversary of her disappearance.

Two years after her disappearance, one of Ms Gay's daughters, Samantha, posted on a Facebook page dedicated to her mother's memory: "To this day we still don't know why or how this tragedy occurred but the pain it has caused is unexplainable.

"The questions left unanswered the thoughts that run through our heads, they're the worst when I get into bed and think about you mum."

Ms Gay was last seen reading a book in the living room of the house she shared with Samantha. When Samantha woke the next morning, Ms Gay was not there.

Police said at the time that Ms Gay had a medical condition and was unable to walk long distances. She had left her personal belongings and medication at home, and did not have access to a car.

Another daughter, Brooke, featured in a Woman's Day story in August to mark National Missing Person's Week.

"It's constant torture. It's too sad for me to think you might have chosen to leave us. And I think, 'there's no way she'd do this to us.'," she told the magazine.

"But then there's the other option that something bad happened to you and you're not safe, and I don't want to think about that possibility either."

Anyone with any information is urged to contact Crime Stoppers on 1800 333 000 or submit a confidential crime report at www.crimestoppersvic.com.au.