The funding will come from the third phase of the Local Roads and Community Infrastructure program, which provides grants to local councils for renewal works and projects.

Horsham Rural City Council mayor Robyn Gulline welcomed the budget announcement.

"We are just stunned and absolutely delighted. It was certainly not expected, but it was very welcome," she said.

Under the program, Horsham Rural City Council will receive $2,856,792 of phase three funding, with the council previously receiving $1,428,396 for phase one and $1,475,924 for phase two.

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Phase one of the program has already been spent on various projects across the municipality, with projects for the second phase still under council consideration.

The grants provided under the Local Roads and Community Infrastructure program are not competitive, meaning councils have more freedom to apply the funding to shovel-ready projects.

Cr Gulline said federal funding was significant as it could match funding for Victorian government grants.

"We are leveraging the federal money to get state money. For a lot of state grants we have to put in money, so we are able to use the federal money as a contribution for state grants," she said.

"The beauty of this is that if we can get grants from the federal and state governments, we actually aren't using ratepayer money; we are using it for other things. It is trying to be more creative and efficient with our resource allocation.

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"So the more grant money we can leverage from other tiers of government who have a much wider tax pool than we do, the better."

Cr Gulline said projects such as the City to River master plan and the water play park were important in transforming Horsham into a tourist destination.

"We are looking at population increase which changes the dynamics in our community. We are attracting all these people, what do we need to do?," she said.

"We are a regional city; what can we do to get our facilities to that regional standard?

"How can it be beneficial to our residents that live here - but also attractive to new residents and to retain our residents.

"It is not only the attracting, it is also the retaining. What do other places have that we don't have that we need to have?"

With the Victorian state budget released on May 20, Cr Gulline said she hoped Horsham would see more funding for roads, including a potential vehicle bridge.

The Local Roads and Community Infrastructure program also provided Hindmarsh shire with $2,161,596 of funding, $2,645,948 for Yarriambiack shire and $3,056,022 to West Wimmera shire.

Member for Mallee Anne Webster said the funding would provide councils with an additional boost for infrastructure projects.

"This Budget injection for our hard-working local councils means even more funding for upgrades to local roads, bike paths, community halls, playgrounds, parks and sports facilities, as well as improved accessibility to public facilities," she said.

"This is fantastic news for local councils across Australia, who will be able to access additional funding to deliver priority local road and community infrastructure projects."

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