Up to 42,000 cubic metres of sand will be dredged from Lady Bay and dumped near the Warrnambool surf club in what the city council has called a "win-win".
The state government announced a $1 million funding injection this week to finally dredge the bay - something that hasn't been done for 10 years.
The works will coincide with the $3.5 million upgrade to the city's much maligned boat ramp which was dubbed the worst in the state after a number of vehicles and boats came to grief trying to launch there.
The dredging works are expected to reduce the surge wave impact on the boat ramp while also replenishing the beach, the council said.
The $1 million funding would be used for a "major one-off" dredging, the council said.
However, it has received permission from the Department of Environment Land, Water and Planning for dredging to occur over the next 10 years.
But if maintenance dredging was needed the council would need to seek more funding.
The previous council had tried to secure a 10-year funding deal for regular dredging of the bay - something that was expected to cost between $2.2 million for the cheapest option and as much as $5 million if they opted to put the sand next to the pavilion.
The dredging, which is expected to get under way within months, will involve a "near-shore deposit" of the sand, which the council said was common practice across Australia.
"The sand will be deposited near the surf club where we anticipate it will help replenish the beach in a win-win arrangement," it said.
Between 38,000 to 42,000 cubic metres of sand is likely to be moved as part of the project.
The council had approved the method at an open council meeting, and staff have been working with consultants to develop a technical specification for tendering.
The council will monitor the success of the dredging over the next 10 years with regular surveys and further dredging when needed.
"Any dredging effort is subject to changing ocean currents and storm events," the council said.
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