The move on the large parcel of privately-owned farm land - probably the best piece of real estate in the country - has sparked backlash with calls for the money to instead be spent on other much-needed infrastructure such as road upgrades.

Member for Polwarth Richard Riordan raised the issue in state parliament and called on the Minister for Regional Development to visit the Port Campbell community and explain to the family why two weeks ago it sent a letter of compulsory acquisition for land adjacent to the Twelve Apostles Visitor Centre.

"For some reason, your department has seen fit to want to compulsorily acquire a parcel of land that has been in one family for a very, very long time - 50 years or more," he said.

"Your department has sent with no notice, no negotiation, no pricing and no structures in place, a letter demanding the handing over of that land from this family.

"Why on earth is your department seeking to spend probably upwards of $200 million on a project, on land acquisition that no one wants, no one has asked for, there is no need to do?"

The federal and Victorian government jointly committed $108.15 million to deliver priority projects in 2018, including an all-weather amphitheatre and viewing deck at the Twelve Apostles and upgrades at Gibson's Steps.

It is unclear how much it would cost to acquire the land and if it is included in the budget for the upgraded visitor centre plans.

Mr Riordan said the family, who also operated a successful tourism business nearby, had tried for 10 years to redevelop the visitor centre and the visitor services at the 12 Apostles on their land but haven't been allowed to.

He said the Shipwreck Coast Masterplan for the region didn't include the compulsory acquisition of land.

"It doesn't say you must go and compulsorily acquire from an unwilling seller and create a business an enterprise that the private sector... is more than happy to invest the money in," Mr Riordan said.

"This is just a ridiculous spend of money that no one has asked for and no one wants."

Mr Riordan said the money could be better spent on the shire's roads which were "universally considered the worst roads in the state of Victoria".

He said he was concerned the government was spending "valuable, precious taxpayer money" on something that there was better uses for.

Mr Riordan said when there was so much infrastructure along the Great Ocean Road to look after, to divert "all these funds to that is just outrageous".

Corangamite Shire councillor Jamie Vogels said the private sector had been wanting to do something on the site for a while and questioned why would you chuck public money into it.

"If they want to chuck a whole heap of money into the Corangamite Shire, it's easy to find where to spend it on - roads," he said.

The state government was contacted for comment.

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