Gladstone Mayor Gail Sellers says flood mitigation work being done at Kathleen Shanahan Park should reduce the flood risk in the Sun Valley area.
Excavation for the $2 million project, on the corner of Glenlyon Road and Philip Street, began last week.
It was first recommended in a 2006 report on reducing flood risks in the event of a one-in-100-year rain event.
Councillor Sellers says it has taken some time to obtain funding for the project.
"We needed to have help with it and we were looking for funding and we did receive a million dollars in financial support from the Federal Government and that was in the Disaster Resilience Package and also Emergency Management Queensland ... so each of those provided five hundred thousand and we've topped up with the rest which is almost another million dollars," she said.
© ABC 2012
18:04 EDT The weather bureau has urged residents in Queensland's Gulf to remain on cyclone alert as ex-Tropical Cyclone Gillian moves overland.