Around 300 metres of the oldest section of track stretching around Lake Wendouree will be replaced next month, The Courier understands.

City of Ballarat council has approved a contract with Fulton Hogan Industries, an infrastructure construction company, to replace a stretch of railway which dates back as far as 1905. Horse-drawn trams used to ply the route when it was originally laid.

The news signals success for a campaign conducted by the Ballarat Tramways Museum to fund the renewal of the most dated parts of the track, which carries more than 30,000 passengers each year.

The Ballarat Tramways Museum marketing officer Peter Waugh welcomed news of the work: "We're delighted," he said. "I didn't think we'd do it, but we did."

Last year, the president of the museum told The Courier that part of the track was so rough it meant that the restaurant car could not operate on the affected section.

Mr Waugh said that the track was also causing damage to some of the historic tram cars.

"It was shaking them to bits," he said. "By replacing the tracks, we'll extend the life of the trams too."

The Ballarat Tramway Museum raised $200,000 through the state government's Pick My Project last year.

Mr Waugh said that the City of Ballarat council had "very generously" contributed a substantial sum for the project.

He said there was some discussion about whether the tracks should be laid in concrete or timber given the heritage nature of the tramline. However, he said concrete made more sense as preservation was challenging given the conditions around the lake.

"In that wet environment, we don't want to have to do it again in 30 years' time," he said.

The trams run up and down the western end of Lake Wendouree on weekends, public holidays and school holidays.

More than 50 volunteers and 250 members help keep the trams - some of which are more than 100 years old - keep running up and down one of Ballarat's most popular leisure areas.

The contract has been signed for $792,418.95 and will cover the replacement of track from the depot end to Carlton Street.

The Courier understands work is likely to begin next month and will take around four weeks to complete.

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