Warrnambool's animal shelter will get an $800,000 upgrade with work to kick off early next year.
The city council allocated $400,000 in its 2022-23 draft budget which was released last week, but it has flagged that the same amount would be allocated next year for further works.
A major upgrade for the pound was flagged by councillors in 2020 with then-councillor Peter Sycopoulis saying it was in "dire need of a "very expensive" upgrade.
Councillor Ben Blain said it would be critical infrastructure for the city as it continued to grow.
"With the renewed service I would hope that we might be able to give some relief for pet registrations as well," he said.
The council said the $400,000 allocation for the animal shelter was the first stage of the upgrade to improve animal welfare.
"This will include an increased space for the high volume of cats that are either surrendered or impounded," it said.
"There will also be increased space for dogs.
"We are working towards ensuring compliance with contemporary animal wellbeing requirements including increased ventilation, improved exercise areas and the removal of chain mesh fencing to reduce the potential for paw and other injuries."
The Braithwaite Street shelter has been operated by the RSPCA for 25 years, and each year it costs the council more than $450,000 to keep it operational.
The site also needs internal drainage improvements, concrete renewal and upgrades to office facilities.
The total project cost will be in the order of $800,000 with the cost spread over consecutive financial years, the council said.
While the $400,000 for the upgrade is coming out of council funds, the council will look to offset the costs by seeking support from the Victorian Government as well as exploring grant opportunities via the RSPCA.
The council will also discuss expanding the regional pound approach to help cover the costs associated with the upgrades.
"We have designs that have been tested via a quantity surveyor and met with the RSPCA to gain feedback and advice on the designs," the council said.
"We will look to commence the project in the second half of the 2022-2023 financial year."
Volunteers look after up to 300 dogs and more than 500 cats that are impounded every year.
Registration fees for unsteralised cats and dogs are set to go up in this year's budget to $220 a year, while steralised animals will remain unchanged at $72.
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