The festival will provide live music on Fiddler's Green, while the Port Fairy Tourism group and Moyne Shire Council are partnering to put on a Street Fair.

This will include stalls in Bank and Sackville Streets, as well as on Railway Place.

There will be sitting areas to consume food by local street traders, while giant games and Tik Tok stations will be set up.

A pipe band will lead a welcome parade down Sackville Street on Friday night, while a boomerang throwing exhibition will be held at Fisherman's Walk on Saturday.

Port Fairy Tourism secretary Jenni Hider-Smith said she was excited about the week ahead.

"It really does feel like the Folkie is back, it's great," Ms Hider-Smith said.

"The street fair will really add something to the weekend, it will be a really positive experience for everyone that comes along.

"It provides some great entertainment for people who don't have tickets for the festival and also for those that do but who also want to come and check out the street.

"It's a great advertisement for the festival, it has happened a lot in the past that people enjoy the entertainment down the street so much that many come back the next year and buy tickets to the festival."

The cancellation of the folk festival in 2021 due to COVID was a blow to Port Fairy's key tourism industry.

Ms Hider-Smith said the importance of the festival to Port Fairy, and the wider Moyne Shire community, could not be underestimated.

"It is such an amazing event and it will play a big role in invigorating the town," she said.

"Even for places like Mortlake and Koroit, the festival provides such positive flow-on effects.

"The street fair will play a key role in getting people from Warrnambool and Hamilton to come over and spend a day in Port Fairy and have a wonderful time."