The Timboon stalwart said he was still coming to terms with the state government's funding boost of $4.5 million for the project.

Mr Kerr said the idea was proposed by the late Geoff Leske in the 90s. "His ghost will be cheering today," he said.

"It's absolutely amazing. We've tried all sorts of things to get the support. It shows if enough people just keep pecking away."

Mr Kerr, who along with other locals including David Pope, Matt Bowker and Mark Cuthell have been advocating for the trail, said he was gobsmacked when the funding was announced.

"I did have my doubts it would happen," he said.

"Some people said let's clear it off and make a trail for bikes and mountain bikes. To do it like this, only in my dreams did I think it would happen."

The state government funds will be used with $2.22 million which Corangamite Shire allocated in it's 2020-21 draft budget.

Mayor Neil Trotter said the funding was terrific news given the project had been a priority for many years with a lot of work done by previous councils.

"We're in very challenging times and many of our residents have been impacted by the economic crisis brought on by the coronavirus pandemic," he said.

"Construction of the 12 Apostles Trail will translate into immediate jobs for shire residents and income for local businesses during the downturn. It will create an ongoing asset that will continue to provide employment and recreation opportunities for our community into the future."

Coastal ward councillor Simon Illingworth said the council had strongly advocated for the project and the government had listened. "It will keep our economy moving. It will provide jobs for our workers and support local contractors and suppliers.

"Most importantly, the finished product will directly benefit locals, providing walking and cycling opportunities, as well as encouraging longer visitor stays."

The council is finishing a detailed design of the trail and consultation with landowners, agencies and the broader community will begin next week.

Warrnambool mayor Tony Herbert welcomed the funding for the project which he said was a win for the region. He said although the 12 Apostles was not in his municipality if visitors had a good experience there they were likely to travel further down the Great Ocean Road.

Glenelg Shire council has also received a big boost with three priority projects getting state government funds.

The council secured a $4.2 million funding package for the Portland Foreshore Master Plan and the Local Port of Portland Bay's marine master plan.

The Portland Foreshore Master Plan will receive $3 million for the replacement of the town jetty and installation of connecting pathways. An additional $1.2 million will be designated for the Portland Bay Marina extension and pontoon upgrades.