The state government will today announce the long-awaited funding for a National Centre For Photography which will be based in central Ballarat.

In all, $6.7 million will be placed in Victoria's budget for the construction of the centre, which will be handed down by Treasurer Tim Pallas, next week.

The National Centre for Photography will be housed in Lydiard Street South at the former Union Bank building. The funding is expected to be made available before the end of the financial year.

Ballarat International Foto Biennale Artistic Director Fiona Sweet said the money was a real investment in arts culture.

READ MORE: Huge boost for Foto Biennale

"It directly supports the arts in regional Victoria and will no doubt generate significant visitation to Ballarat," Ms Sweet said.

"We secured the Union Bank building with support from private supporters, all of whom are from Ballarat and the region, we wouldn't be here today if they didn't share the same vision we did.

"We're thrilled that a state-of-the-art gallery will be able to become a reality."

The centre will include gallery spaces for major temporary exhibitions, opportunities for community artists to exhibit, a dedicated photobook library and it will provide year-round programming for artists.

It will also accommodate the offices of the Ballarat International Foto Biennale while a curated public and education program within the centre will have the potential to add to the tourism dollar by attracting both national and international artists.

Wendouree MP Juliana Addison said the Lydiard Street precinct was critical to the goldfield's long held goal of a UNESCO World Heritage listing, and this would only enhance Ballarat's heritage going forward.

"This is going to be something the whole of Ballarat can rejoice in," Ms Addison said.

"Bringing this building back to life will be a fantastic addition, as Lydiard Street is going to be a focus of Ballarat's World Heritage listing offering.

"This will enhance our bid to have that international recognition."

The funding is hoped to be a catalyst for a tourism revival in the city with the Art Gallery of Ballarat having recently reopened with an announcement expected from Her Majesty's Theatre soon.

In 2019, the the Ballarat International Foto Biennale brought 37,800 visitors to the city, an increase of more than 10,000 on the 21017 edition.

It contributed $7.27 million of direct economic impact from August to October last year. It saw more than 150 artists participate with 190 event. In all, 135 helped run the event across the city.

Ms Sweet said Ballarat was growing its artistic offering with Ballarat's central focus of heritage marrying up with contemporary art.

"I've only been here five years and it was something I was quite aware of that there were only a couple of things you could go to if you were involved in arts," she said. "You could go to the theatre, or go to the art gallery as the two major institutions.

"We know we can grow that, and so what we are saying here, we want to be the tiny little start, we don't want to be the first and the last.

"We've taken a chance, we've invested with support from the community and the idea is if people are choosing where they come in regional Victoria, they can know there are multiple arts things they can see in that weekend, not just one or two."

Victorian Minister for Tourism, Sport and Major Events Martin Pakula said it was estimated the centre could bring in more than 50,000 visitors to the city over the next two years.

"The Ballarat International Foto Biennale is one of Victoria's iconic regional events and the National Centre for Photography will allow it to contribute to Ballarat's economy and jobs strength year-round," Mr Pakula said.