The philanthropic organisation received $1,047,000 from the state government's Regional Infrastructure Fund on Friday.

The funds will go towards transforming Lydiard Street's Chatham House building to a volunteering hub, with office and collaborative meeting spaces fitted with modern technology.

The hub will be the second of its kind in Victoria.

The Ballarat Foundation already has a planning permit and design plans, and work is expected to get under way by the end of the year.

Ballarat Foundation chief executive Andrew Eales said the organisation had done a lot of planning since purchasing the building four years ago.

"Today's announcement is obviously a very, very significant next step in finalising this project. We still have funding applications in front of the federal government to finalise project funding and we are also working with other community organisations about their potential involvement in the project," Mr Eales said.

Mr Eales said the project was crucial in bringing the community's voices together after two years of coronavirus.

"What we have seen in the last two years, in particular with the economic and health issues that everyone knows about, is that there has been disconnection in the community so we see our role very much as enabling people to come together, to work together with common thoughts around solving community issues," he said.

The hub will provide new opportunities for co-location and reduce overheads for community and not-for-profit organisations with volunteers.

It will lead training, improve collaboration and knowledge sharing, provide communal meeting and training spaces, and increase visibility for the sector.

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Ballarat Foundation chairperson Wayne Weaire said it was the end of 20 years of planning for the community to create a home for philanthropy in Ballarat.

"We know that government builds community, that business and commerce make community happen but it's community itself, its philanthropy that enriches and makes the community itself," Mr Weaire said.

"The Ballarat Foundation, 20 years ago, started saving money so now we have bought the property four years ago and now, in partnership with the government, we can now renovate this property and turn it into a wonderful place for volunteerism."

The foundation requires a further $700,000 to complete the redevelopment and Mr Eales said he was confident this would be achieved through talks with other levels of government and the community.

Ballarat Foundation volunteer Helen Bloom said a volunteer hub would make a difference to her and other volunteers.

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"While we still feel like a team, to come together in person more readily and easily will be an advantage as well," Ms Bloom said.

"It can only grow from here."

Member for Wendouree Juliana Addison said this important state government funding would enable the Ballarat Foundation to continue its great work.

"By upgrading their building and establishing a volunteer hub, this funding will support the Ballarat Foundation and other local organisations to do even more for the community," Ms Addison said.

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