Cobden Technical School is set to undergo a much-needed $6.6 million upgrade.
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Principal Rohan Keert said the whole community was thrilled with the news.
The school had previously been given funds to complete a masterplan.
"We finished that process and we sat with our fingers crossed hoping for a favourable decision," he said.
Mr Keert admitted he hadn't expected the school would be allocated the total amount promised.
He said ahead of the budget he had expected the project may be delayed.
"We're absolutely delighted it will proceed," Mr Keert said.
"By the end of 2024 we should be ready to go out to tender and start construction."
Mr Keert said the $6.6 million development, which was stage one of a total upgrade of the school, would see a number of buildings demolished and replaced.
"A number of buildings, including the main administration building, will be demolished and in their place will be a new admin building, a new library and a new well-being centre."
Mr Keert said stage two of the school upgrade, which would require further funding, would be replacing classrooms.
The Labor government made an election promise to fund stage one of the upgrade in the lead up to the 2022 election as part of a $24 million pledge to south-west schools.
The Portland BMX Club will be able to upgrade its track to boost safety for members, thanks to a $100,000 commitment in Tuesday's budget.
President Jeremy Finck said it was great news for the club, which had gone from strength to strength in recent years.
"We've gone from 10 members to about 40 or 50," Mr Finck said.
"This will allow us to make the track a lot safer."
Member for Western Victoria Jacinta Ermacora said the budget would make a big difference to south-west residents.
"With additional investments in roads, cost of living support, sporting facilities and community groups - this budget is delivering for communities across Western Victoria," Ms Ermacora said.