The state government has given heritage approval for temporary railway gates to be installed at the Lydiard Street level crossing.
The crossing on one of Ballarat's main roads has been closed to traffic since May last year when a train smashed into the heritage gates.
The government could not confirm when the temporary gates would be installed or when the level crossing would open to traffic.
It said works would begin next month following Heritage Victoria's approval of plans for the installation of temporary boom gates, with major works starting at the earliest available opportunity.
Member for Western Ballarat Jaala Pulford said there was no specific completion date but the heritage approval was a very important step for Lydiard Street to reopen.
"It shouldn't be too much longer now, as soon as assumably possible," Ms Pulford said.
"The Lydiard Street gates have been maddening, frustrating, I think for many people in Ballarat and we had some good news last night with the heritage approval for the temporary gates so what that means is the street will be able to open again.
"It's great excitement for businesses in the area and for people coming from the station and people moving from that really important south corridor in our city."
Ms Pulford said this important milestone meant Lydiard Street could open while a permanent situation was advanced.
She said for those keen to see the long-running saga of fixing the gates to end, the permit for the temporary gates were valid for 18 months.
"This means that a very, very complex engineering and design solution, including really quite remarkable heritage features, is able to be done and we can all just get on with things," Ms Pulford said.
Under the permit conditions, the damaged heritage-style swing gates will be removed, photographed and catalogued before being stored in a safe location in Wendouree, and will be subject to regular inspections to ensure they do not deteriorate, the government said.
Specialist contractors and V/Line technicians are expected to finish preparatory works on-site within the next three weeks before the installation of the temporary boom gates can proceed.
Crews have already completed non-destructive digging, service location and cabling works at the level crossing, and will spend the next few weeks installing critical signalling infrastructure and foundations for the temporary boom gates.
In May, just before the one-year anniversary of the crash and road closure, the government announced plans to spend $10.2 million to reopen the Lydiard Street level crossing with boom gates and an upgraded signalling system.
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