The Yarriambiack Shire says three new gates for the Warracknabeal weir will mitigate the effects of future floods.
Water Minister Peter Walsh announced funding for the project yesterday, which is due to be completed in May.
Mayor Kylie Zanker says the shire will now be better able to accurately manage water flows through Yarriambiack Creek.
"The grant of $105,000 is fantastic," she said.
"Obviously it means that the weir can be finished and it's obviously a project that council and the community is really passionate about.
"So it's great to be able to do that and to see it finished because the creek's an amazing asset and we want to do what we can."
She says the shire will no longer have to take drastic measures to prevent flood damage, as was seen two years ago.
"We actually had to cut the road and the town was basically isolated from one side to the other, so that stops that happening again," she said.
"We have much more of a stronger control or a more accurate control of the weir gates rather than having to cut the road to let the water out quickly if need be."
© ABC 2013
12:26 EDT Thunderstorms have rolled through Melbourne this morning bringing heavy rain, and are set to become more widespread this afternoon.