Work on the planned new welfare services hub and expanded hospitality-bistro section is expected to start later this year and be completed in early 2015.

Another two stages costing a further $1m are in the pipeline.

Funding is also being sought from state and federal governments, philanthropic funds and other sources.

The project is the largest expansion of the Returned Services League sub-branch base since its current building was erected in 1972 on leased Crown land overlooking the foreshore.

Seating capacity for dining and conferences will be expanded from about 150 to potentially more than 400 people. 

Most expansion will be on the vacant Merri Street frontage. 

The gaming room will be shifted to a separate section and its window frontage overlooking Lake Pertobe will become part of the expanded dining area.

Negotiations are being finalised for a new long-term lease on the Artillery Crescent Crown land to extend it another 30 years beyond the current expiry of 2020.

The expansion will cement Warrnambool’s sub-branch role as a regional hub and the only licensed RSL covering the south-west regions of Glenelg, Southern Grampians, Moyne and Corangamite shires.

It will provide a one-stop-hub for war veterans and their families seeking welfare assistance and advice rather than having to visit various agencies scattered around the city and district.

Legacy and the Department of Veterans Affairs have been offered office space and are considering joining the hub.

Sub-branch president John Miles and secretary Alex Gannaway said it was an exciting chapter for the sub-branch and associated club which has more than 2600 members.

“Our welfare section is equally as important as our commercial component, so we are aiming to expand both at the same time,” Mr Gannaway said. “We’d then like to do stage three and four with expansion on the lake side and refurbishment downstairs when our loan is reduced sufficiently.

“Veterans welfare needs will continue into the future with ex-service personnel from Afghanistan, East Timor and the Solomons in our region.

“They can be just as traumatised as veterans from the Vietnam War.” City council corporate strategies director Kevin Leddin told councillors on Monday night the RSL’s reports demonstrated sound financial position and ability to repay the proposed loan.

“The club’s financial position has improved markedly in recent years on the back of extended membership and therefore expanded hospitality trading,” he said.

“It has extended its membership to over 2600 in recent years as it refocused its business model.”