Ballarat Detective Sergeant Brett Caddy said police arrested a 29-year-old Creswick man in the Ballarat central business district late in the evening.

He will likely be charged with carjacking and theft and was remanded in custody to appear in Ballarat Magistrates’ Court on Wednesday morning.

It's believed the victim was sitting in his white Holden Commodore in a car park near Alfred Street North.

The alleged offender is reported to have approached the car, opened the door and yelled at the victim to get out.

The owner of the car, a 25-year-old man from Canadian, immediately hopped out and the alleged offender then sped off about 3pm.

The stolen Holden turned up outside Craig's Royal Hotel on Lydiard Street with the car keys still in the ignition about 4pm.

Several police remained outside Craig’s Royal Hotel with the victim, who was assisting police with their enquiries. While car thefts are common in Ballarat, carjackings are not.

The Victorian government introduced a specific carjacking offence back in December.

The new offence carries a maximum penalty of 15 years in jail.

Minister for Police Lisa Neville said carjackings were terrible crimes. “There’s just no excuse for this offending, and that’s why these laws are so important to hold perpetrators to account,” she said.