The project will include a new playground at the north end of the park, new footpaths, enhanced landscaping, signage, a new toilet block/change facilities, shade infrastructure over play areas, additional seating and picnic tables and an Aboriginal language soundscape.

This element of the project - a joint initiative with Gunditjmara - will give Aboriginal children, adults and elders the opportunity to make recordings about the site and include an area to play in surrounded by indigenous plants.

The park will also be home to south-west Victoria's largest climbing net, bike tracks and inclusive, all-abilities play elements.

The council will invest $1.45 million into the project - an amount that was matched by the federal government on Monday.

Deputy Prime Minister Michael McCormack was in the city to announce the funding. He said the government was committed to supporting Australia's regions.

"We are supporting our regions through investing in important local infrastructure, as well as great community-building and planning initiatives under the Building Better Regions Fund and other government priorities such as the Regional Growth Fund and our decentralisation agenda," Mr McCormack said.

Member for Wannon Dan Tehan said he was delighted to announce the funding for the park, which was a favourite spot for his children.

Mr Tehan said he believed Lake Pertobe was the best playground in regional Australia.

"I know families across the Warrnambool region will be incredibly happy with this announcement," he said.

Warrnambool mayor Tony Herbert also welcomed the funding announcement.

"It's probably one of the best family parks in Australia I would suggest," Cr Herbert said.

"To have this sort of level of funding to turn a great park into something even better is really welcome."

The initial funds will be used to install a new playground at the north end of the park, new footpaths, a new toilet and beach change facility and a cultural nature play area.

Members of the public were given the chance to have their say on the masterplan last year.