A major employer and income source for the city, and a point of recognition for Ballarat internationally, the decision to close is open-ended, says CEO Sarah Quon.

In a statement issued to media by Sovereign Hill, Ms Quon said staff and visitor safety was a priority, as was ensuring the ongoing viability of the 50-year-old venture.

She said Sovereign Hill was working with the Media Entertainment and Arts Alliance (MEAA) to try to find the best outcome for permanent and part-time staff.

Casual staff were told earlier in the week they would no longer receive shifts beyond the present, and would be paid out for the next two weeks.

Ms Quon told The Courier as of midnight on Friday, all staff at Sovereign Hill, including the executive and managers, would:

'... be stood down in accordance with the Fair Work Act 2009 for 20% of their Full Time hours and for Part Time employees 20% of their current roster which will soon be extended the extra days. Full Time and Part Time employees will continue being paid for 80%. This means:

'Full Time employees over the next two weeks commencing Saturday will work for 4 days instead of 5 and be paid accordingly;

'Part Time employees will have a reduction in their roster of 20%.'

In a letter to staff, Ms Quon said Sovereign Hill faced some 'very hard choices'.

"I want to be as honest and transparent as I can with you that Sovereign Hill faces our greatest financial challenge in our nearly 50-year history. Many factors have influenced our decision making over the past few weeks.

"Visitation has dropped dramatically since coronavirus emerged and we will continue to experience its devastating impact for many months. We now need to make some very hard choices to protect the long term viability of the organisation.

"Once we have a clearer picture of our discussions with Government we will inform you. Much of this decision making will hinge on these discussions and what ongoing arrangements may look like. Our aim is to sustain this arrangement for the period we are closed.

"However the percentage of paid work could reduce over this time. The least desired outcome would be that the vast majority of our workforce are stood down without pay. We understand the impact of this and are working to do everything in our power to avoid this. The Board and Management are united in our resolve."

Adam Portelli, Victorian and Tasmanian regional director of the MEAA, said the decision by Sovereign Hill shows the crucial need for governments to involve themselves more closely in supporting regional economies during the crisis.

"Today's announcement highlights the need for the Federal Government to get serious about stimulus now, and urgently support workers and their employers in regional Australia," Mr Portelli told The Courier.

Visitors to Sovereign Hill were disappointed but understanding of the difficulties facing Sovereign Hill, and expressed sympathy for staff whose jobs were at stake.

Emma Richards was on the last day of a trip to Victoria from Tasmania. She said the decision to close was "understandable", but planned to continue with her visit on Friday.

"We are very cautious with what we do - we are very mindful of what's going on. We're not going to get too close, we'll just enjoy it while it's open.

"We just want to support them, because once it's shut, they're really done over - it's an income for them."

Karen and Clive West were on a road trip from Adelaide, and had stayed overnight in Ballarat.

"We've haven't been anywhere close enough to be around a lot of people," Karen West said.

"We bought lots of stuff, and bought our lunch and food from them to give a little bit of support."

"It was that quiet yesterday, it was almost dead, which was a shame," added Clive West.

"We feel sorry for the people working there. We definitely shared our concerns with them. Some of them working in there, it's their own business and if they can't sell their stuff, putting food on the table is going to be hard - so if we can help them out at all, we will."

Sovereign Hill president Damien Butler said in a media statement the decision was one of the hardest the board had ever made.

"We play a vital economic role in Ballarat and in Victoria. We must survive so we can protect jobs - for the people we employ directly and the Ballarat people and businesses that rely on us."

In another media statement City of Ballarat said it would 'stand by' Sovereign Hill, and 'extend our thoughts to the staff and volunteers during these difficult times.'

"Sovereign Hill is part of Ballarat's DNA and we will be holding discussions with our federal and state representatives to ensure our tourism industry gets back up and running sooner rather than later," Ballarat mayor Ben Taylor wrote.

"We will be advocating hard for Sovereign Hill, as well as, for all the other businesses in Ballarat that will no doubt be affected by COVID-19."

The decision comes one day after Ballarat's first coronavirus case was confirmed.