Glenlyon artist Jason Waterhouse has been selected to complete the artwork which will be installed in the Daylesford Lake precinct in August.

The piece chosen was Waterhouse's work titled Cottage and will be created in decorative wrought iron inspired by the gates at the Convent.

Mr Waterhouse said the work references the rich opulence of the gold rush and pre-war spa resort era in its patterning.

"I wanted the work to have a historical connection to the town, so you will notice it has a lot of multi-layer connections to the town" he said.

"Cottage pays homage to the miners, workers and farmers on whose backs the riches of Daylesford were built. 

"It's in the form of a miners cottage but created out of wrought iron ... the wrought iron represents the wealthy class that fostered off the backs of the miners."

Having grown up in Daylesford, Mr Waterhouse knew the site of the project was an important element to its success of providing a place of contemplation for tourists and locals.

"I want people to embrace the art as a new point of interest for Daylesford," he said.

"We need moments for contemplation and the only way to do this is through the arts, this is a positive step for health."

Commissioned by Hepburn Shire Council after the recommendation from Council's Public Art Panel, Mayor Cr Kate Redwood AM said council were thrilled to be supporting public art across the shire.

"The Public Art Panel have selected this work for its high quality presentation and its broad community appeal," she said.

"We have no doubt Jason will produce a stunning work that will enhance one of Daylesford's premier cultural destinations."

Mr Waterhouse has previously completed public art commissions at Time Lane in Ballarat.