Restoration work on Port Fairy's historic Captain John Mills Cottage, located in Gipps Street, has come to an end, at a cost of $200,000.

The funding came via an allocation in 2017 from the Victorian government's Living Heritage Program.

Restoration included urgent conservation works to the interior and exterior of the building, including specialist wallpaper, timberwork and plaster conservation.

An open day was held in May last year, allowing the public an opportunity to see the progress of the restoration works.

Member for Western Victoria Gayle Tierney said Mills Cottage held a special place in Port Fairy.

"It's a striking reminder of our significant history," Ms Tierney said.

"Heritage sites like these aren't just bricks and mortar, they're our very identity.

"This is a fantastic example of what our Living Heritage Program is all about.

"We're so proud to have helped conserve this important historical building for future generations."

Planning Minister Richard Wynne applauded the works and spoke of the importance of the building.

"We're proud of our Living Heritage Program, providing much needed grants to projects that address risks to historically important places all across Victoria," Mr Wynne said.

Built in stages from 1841 and 1856, the cottage is one of the oldest buildings in Victoria and was home to John Mills, a Harbour Master at Port Fairy from 1853 to 1871.

Mr Mills and his brother Charles were sealers and whalers, when both were important industries in the early life of Port Fairy.

The cottage remained in the Mills family until 1909, when it was sold to James Bragg, a carrier in the town.

Mills Cottage remained in the hands of private owners until 1984.

It was then purchased by the state government.

The historical significance of the cottage was the main reason behind the government's decision to purchase it.

This decision has been backed by significant government funding from 1984 towards the restoration of the .3 hectare (.75 acre) property.