Hanging Rock has been saved from commercial development, thanks to a rescue package sent from the state government.
Planning Minister Matthew Guy visited the Rock on Friday to announce funding of $1 million to protect the East Paddock from development.
Mr Guy said the funding would be used to maintain recreational facilities and manage the costs of the reserve.
"More people will be able to enjoy the natural beauty of Hanging Rock with proper funding now guaranteed," Mr Guy said.
The funds, of $250,000 per year for the next four years, will be administered by the Department of Environment and Primary Industries.
Mr Guy told the Express that the funding was conditional on Macedon Ranges Shire Council agreeing not to pursue commercial development at the Rock in the long term. Council had been proposing to seek private investment to develop accommodation and a spa resort at the site in order to meet the maintenance and operating costs of the reserve.
Macedon Ranges Shire Mayor, Cr Roger Jukes, said the $1 million boost was a welcome contribution to essential works needed at Hanging Rock, but that many long-term challenges remained.
"Council still needs to consider the implications of the state government announcement for the long-term future of Hanging Rock," Cr Jukes said.
"At this stage we have not formalised any agreement. Hanging Rock needs ongoing investment if it is going to continue to thrive as a natural asset and tourist icon."
Hanging Rock Action Group president Luke Spielvogel said the announcement was an exciting development.
"It really represents a win-win situation in that the State Government's commitment addresses council's fiscal concerns while still maintaining the conservation values of the Hanging Rock precinct," Mr Spielvogel said.
"Resolutions will have to go back to council and we look forward to the opportunity of working with council, the State Government and the broader community to help protect and preserve Hanging Rock."
Macedon Ranges Residents Association secretary Christine Pruneau also welcomed the news.
"Great stuff, keep going, next protect Macedon Ranges the same way ... make it plain and permanent," she said.