The Ballarat station southside masterplan proposal, which is seeking to review how land between Lydiard and Peel streets is used, could radically change how that part of the city is used and perceived.

The plan opened for the first stage of community consultation this week - already, ideas like activating the space around the station and creating a more accessible entrance have been suggested, while keeping the station's heritage and purpose front of mind.

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An FAQ document from the Victorian Planning Authority, which is producing the masterplan, notes "(o)nce the masterplan is finalised and in the planning scheme, Council will take over the project and be responsible for putting the plan into action".

City of Ballarat mayor Daniel Moloney said it was the next step in modernising Mair Street, following the investment in expanding the city's hospitals, and GovHub, which is approaching completion.

"There is a whole lot of poorly-used government-owned land at the moment that can be freed up for appropriate development," he said.

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"I've long been advocating that we need more residents in this part of the CBD, and people will gravitate to the CBD when they can actually see those activity centres are exciting places to be.

"At the moment we have a massive shortage of one and two bedroom accommodation, everything seems to be geared towards three or four bedroom houses in the suburbs."

In the long-term, this would create a better link between council's proposed Bakery Hill Urban Renewal Plan and the city's heritage precinct, he said.

"Every well-developed city has a good respect for its past but an eye on future opportunities as well," he said.

"The cities that do it well have great heritage precincts but also some newer areas, and people can move well between those two precincts.

"This has got potential to open it all up to business, commercial, and residential opportunities - ultimately, it's how we connect those two precincts."

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Potential residential developments along Mair Street also have a topographical advantage, he added.

"On Mair Street, as you head more to the east, it goes down into a gully, and that has potential to build up - I think council needs to look seriously at height limits," Cr Moloney said.

"If there's a place you can build up that doesn't wreck the city's skyline, that's it.

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"At the moment, if you build up in most other places, you'd obscure beautiful heritage buildings, and that's the thing we're trying to avoid

"Your development needs to take place in areas that are not going to disrupt the heritage fabric of the CBD."

Cr Moloney has a background at V/Line before joining council - he said he hoped the station building itself would also benefit from the masterplan.

"We definitely need to improve access to the train station - the heritage significance of the building has been used as an excuse to not properly make it accessible," he said.

"There are ways you can make a beautiful old building accessible, but still respect its heritage.

"An underpass is one of those things people have said they want to see, but even if it needed to be an overpass, there's some very discreet ways you can do it without seeing some of the monstrosities at modern train stations.

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"What's happened at Wendouree station makes sense at a modern station, but it'd be horrific to see it at a place like Ballarat station - Geelong station's been able to do it.

"Some general upgrades to the building would be great, and it's been a pity to see there hasn't been more investment in the building, like fixing up the old tower that burned out in the '80s - the waiting room's been improved a little bit but there's so much more potential in turning this into a grand old lady."

Meanwhile at the station, preliminary works have begun to build a new local bus interchange on the northern side, while Ballarat Line Upgrade works are under way and no trains are using the platforms.

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"Early works for the Ballarat Station bus interchange, which include relocating and replacing a critical signal cable, are almost complete," a VicTrack spokesperson said in a statement.

"The contractor appointed to construct the interchange, BMD Constructions, has carried out site investigations and is scheduled to begin major works in the autumn."

To have your say on the masterplan proposal, head online to Engage Victoria.

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