The university has renamed it the Sisters of Mercy Theatre.

The move to remove the Mulkearns name comes after clergy sexual abuse survivors said last year's state government inquiry into institutionalised child abuse clearly showed former Ballarat bishop Ronald Mulkearns, after whom the theatre is named, had failed to act on paedophile priests. 

"The education wing of ACU's Ballarat Campus recently underwent a major refurbishment," ACU's acting director of marking and external relations Chrissa Favaloro said.. 

"As part of that process, the university wished to acknowledge the 104 years of education work the Sisters of Mercy had undertaken on the site."

Sexual abuse survivors spokesman Andrew Collins said the name change had been something the community had been requesting for quite some time. 

"It is a good move to change the name, it is very important for survivors," he said.

"It is a very positive move." 

Mr Collins said there was a lot of discussion about a year ago concerning the potential name change, however, admitted it was disappointing it took so long to happen. 

He said Bishop Mulkearns was in charge of the diocese in the 1970s when more than 107 substantiated cases of abuse occurred.

Speaking at the 2013 inquiry, current Ballarat Bishop Paul Bird said Mulkearns had made "tragic mistakes" in his handling of sexual abuse cases, including moving priests around the diocese. Bishop Bird's predecessor Peter Connors also conceded Bishop Mulkearns had to accept responsibility for what had occurred.

Bishop Mulkearns, who now lives on the Great Ocean Road, was excused from giving evidence at the inquiry due to suffering a stroke.

Mr Collins said inquiry committee member Nick Wakeling also said during the hearing: "The evidence is clear, the blame should be sheeted back to the diocese".

"The final report of the Victorian inquiry, Betrayal of Trust, was scathing of Mulkearns and the culture of secrecy he cultivated, along with the fact that none of the abuses were reported to police," Mr Collins said. 

"Commenting on how Mulkearns handled criminal abuse matters, Melbourne Archbishop Denis Hart said that 'the covering up and the doing nothing means that it is worthy of great condemnation'."

Mr Collins has previously said the Mulkearns Theatre, and its prominent place in the Mair Street university, was causing hurt and anger among survivors and their families, particularly of those who have since committed suicide.