Calare MP Andrew Gee joined mayor Gary Rush at the planned site of the museum at the old Railway Institute to announce the funding under Round 3 of the National Stronger Regions Fund.

Mr Gee said the museum would add to the cultural fabric of Bathurst and build on the region’s strong links to rail – particularly as the home of former train driver and prime minister Ben Chifley.

“This is a great result for Bathurst, considering this was such a hotly contested funding round,” Mr Gee said.

“The facility will value-add and strengthen the visitor economy whilst at the same time preserving and conveying the significant story of rail for Bathurst and NSW.”

Once complete, the museum will house a scale model of the railway line between Bathurst and Tarana donated to council by local couple Paul and Bonny Hennessy, and will also be home to a restored $85,000 railway carriage purchased by council this year.

The museum will be set up to accommodate school visits and social bookings, along with tourist visitors.

Council has budgeted around $2.4 million to redevelop the institute building, including the $965,250 from the National Stronger Regions Fund, $213,000 from the state government and about $1.2 million from council reserves over the next two years.

Cr Rush said research had shown the Bathurst region received around $1.65 in return for every dollar invested in local tourism assets.

He said the rail museum would add to a list of local cultural assets including the Australian Fossil and Mineral Museum, Chifley Home and National Motor Racing Museum.

“What we will see on this site is another cultural facility in Bathurst to add to the unique museums already operating in the community,” he said.

“As a council we are really determined to drive the local visitor economy for the benefit of our region.”

It is hoped the rail museum will open mid-2018.