The Hazelwood Pondage Caravan Park will close, and transform into a day trip facility in July 2018.
Latrobe City Council are initiating the transition, and stated that after the closure of Hazelwood Power Station, they had been unable to secure an extension of the existing lease.
They understand it will be difficult for permanent site holders, but are looking to transform the area into a short stay site with 72 hour permit zones for camping and recreational vehicles.
It will also include a maintained grass area, picnic tables, barbecues, a toilet block, jetty and a playground.