Councillors will vote on Monday on whether to award a $1 million contract to fund a scaled-back dredging program.

The council had sought tenders to remove 35,000 cubic metres of sand from the bay, but all five tenders that came in were higher than the $1 million budget.

Instead, the council looks set to award a $1 million tender to remove just 20,000 cubic metres from the bay rather than the 35,000 it had planned in the hope that the state government will allow them to divert more funding to the project.

"Council is in discussions with state government agencies to redistribute already committed design funding to maximise the opportunity to undertake additional dredging while the equipment is on site, noting the high mobilisation and site establishment costs that would already be incurred," the council agenda says.

In February, the state government announced $1 million in funding to dredge between 38,000 and 42,000 cubic metres of sand from the bay.

The project was touted as a "major one-off" dredging of the bay - something that hadn't happened for 10 years.

The dredging works coincide with the soon-to-start $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.

The ramp works came in under budget at $1.89 million, and about $1.6 million in leftover cash was redirected to fund more upgrades around Warrnambool's new boat ramp.

The one-off dredging program will involve a "near-shore deposit" of the sand, which the council had 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.

Former member of the now defunct council harbour reference group Tammy Good said it was disappointing the dredging project could be compromised because of funding.

"If they're going to do it they need to do it properly," she said.

However, she said the biggest issue the reference group had with the dredging was dumping the spoils out the front of the surf club and creating a sandbar.

She said they had wanted the sand dumped behind Lady Bay, or a hybrid model.

Ms Good said the area between the Pavillion and the Hot Springs was reclaimed land and she would love to see the whole area redeveloped for public recreational use.

"Putting sand in there behind that would be a step in the right direction," she said.

Steve Tippett, who was also on the former reference group, said it was disappointing but 20,000 was better than nothing.

"It's possibly as good as it's going to get to get the boat ramp done," he said.

Minister for Fishing and Boating Melissa Horne said Warrnambool's Lady Bay boat ramp was a vital launching point in south-west Victoria and the upgrade works would not only provide better access, but also ensure it could continue to be enjoyed by the community for years to come.

"Dredging works will also boost safety and reshape the seabed profile in the harbour - reducing the need to undertake large-scale work in the future," she said.

The government, through Better Boating Victoria, provided $1 million to the council for critical seabed profile dredging and was based on estimates received from the council prior to tenders for the works being advertised.

The proposed volume of material to be removed from the harbour included in the tender specification was based on an environmental dredging management plan prepared for the council.

The management plan also recommends regular maintenance dredging of the harbour every two to three years to help reduce the need for large-scale dredging which was last undertaken in 2009.

The government has not been approached by the council to contribute any additional funding to the dredging project.

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