The bus interchange will be built on the eastern side of the station, next to the new multi-level carpark in vacant VicTrack land north of platform two.

The 12-bay interchange will remove idling buses from residential streets when complete - the state government said it will also mean smoother journeys for people.

A footpath will also be built to improve access, but details on this component are still being worked through.

State Public Transport Minister Ben Carroll, at the station on Tuesday morning to announce BMD Constructions would be building the project, said heritage concerns had been acknowledged during community consultation, with Heritage Victoria included in the design consultation process.

However, there was no news on improving disability access to the station - when the interchange is complete, people who require mobility assistance will still need to walk to the Lydiard Street crossing to access platform one, or use the wooden overpass.

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Mr Carroll said the interchange is a key part of the Ballarat Line Upgrade, with final construction works due to be finished by the end of January, when the new, more frequent train timetable begins.

"We're going to start work as soon as possible to capitalise on the shutdown on the Ballarat line while we do our upgrades ... we're hoping it will be open mid-next year," he said.

"We need to continue with our bus improvements, I'm very mindful of that, and making sure the buses are getting people where they need to go, that it's modern and connects with the train line. I'll have more to say and look forward to coming back to Ballarat in due course."

While the bus interchange will make it easier for people with mobility issues to get on and off buses safely, Mr Carroll acknowledged "more work will need to be done" to improve access.

"20 per cent of Victorians that have a disability use public transport and we do need to make sure it's disability compliant, whatever improvements we do," he said.

"Having the buses located here at the station will be very much a better option for people with disabilities rather than being on the streetscape.

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"Nothing's off the table, but we have heard loud and clear we need better pedestrian access that will also support the disability sector.

"We have committed to building a better path to Ballarat station - it's still being worked through, we know we've got more work to do."

Public Transport Users Association Ballarat convenor Ben Lever said it was good to know works would begin in January, but questioned the years-long delay.

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"It will be great to get the buses closer to the station building, to make for a more seamless journey for passengers," he said.

"However, it's disappointing that it's taken this long - the bus interchange was originally slated for completion by the end of 2018, and even as recently as February VicTrack indicated major works were supposed to take place this year. Ballarat Station is first and foremost a transport hub, and it's disappointing that the actual public transport improvements seem to have taken a back seat to private development in what was supposed to be a station precinct redevelopment.

"The government has also repeatedly tied the completion of this bus interchange to conducting a proper review of Ballarat's bus network. A comprehensive review like that takes time, from planning to public consultation to hiring and training drivers to implement it, so now that construction seems to be on its way, it would make sense for the government to start the review as soon as possible."

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There will likely be more work at the station in the future, with the line upgrade and Ballarat station precinct works - the new car park, hotel, Goods Shed, and plaza - nearing full completion, but Mr Carroll noted heritage was at the forefront of discussions.

"There was a lot of community feedback about wanting to preserve the heritage - Ballarat is a historical town to begin with and the local heritage community here is very vigilant about maintaining heritage," he said.

"It's necessitated bringing in Heritage Victoria to talk about the awnings, the building, what sort of works we can do - we do need to keep the conversation occurring with Heritage Victoria because we are mindful we'd like to keep doing improvements at the Ballarat station."

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