Fiona Hull, 47, of Spring Dam Road, successfully applied for bail in the Warrnambool Magistrates Court on Thursday.

Magistrate Cynthia Toose said Ms Hull had last been in court during 2010 and she bailed her with a $3000 surety.

Other conditions included an overnight 8pm to 7am curfew and that Ms Hull comply with the Court Integrated Services Program, including not using illicit drugs. 

Police Senior Constable Steve Parkinson said officers pulled over Ms Hull driving a Holden Captiva on the Princes Highway at Terang at 8.30pm on Wednesday night.

In the back seat was a large shopping bag containing a vacuum sealed bag.

In that bag there were three smaller bags holding a total of 1.257 kilograms of cannabis, valued at up to $20,000.

Officers also located $580 cash that Ms Hull said was to pay electricity and mechanic bills.

She said the cannabis was for her own use and for her son, so he didn't use ice.

Ms Hull said an envelope had been placed in the back of her car, she drove to the Mount Moriac Hotel, where cannabis was exchanged for the envelope.

She has been charged with trafficking and possession of cannabis and possessing the proceeds of crime.

Ms Hull has nine prior offences relating to drugs and other court appearances for assaults, thefts and breaching an intervention order.

Earlier: A 47-YEAR-OLD Terang woman caught with cannabis worth $20,000 will appear in court on Thursday.

Warrnambool police said the woman was intercepted by officers in Terang at 8.30pm and found with 1.257 kilograms of cannabis.

She was arrested, interviewed and remanded in custody overnight by police.

The woman will appear in the Warrnambool Magistrates Court for a bail/remand hearing on Thursday charged with three offences including trafficking cannabis.

Police will allege the woman has prior court appearances for drug-related offending.