According to owner Mary Zurcas, the construction will soon result in the addition of a café, and an updated front for the hotel, which sits opposite Victoria Park Lake, along Wyndham St in Shepparton.
“I wanted to give it a bit of a facelift,” Ms Zurcas said.
Ms Zurcas said she drove by one day and realised the building was looking older and more tired.
She said the new entrance would have a similar look to the old one being replaced.
The new café, she said, would be open to the public, serving breakfast and lunch.
Construction is slated to be completed within about four months.
Ms Zurcas is hoping things will be wrapping up by April or May.
In the meantime, the hotel and restaurant are still open to the public.
Guests can access the hotel via Hayes St, and there will also be an alternate access point for the restaurant.
Works are mainly happening from 9am to 4pm, according to Ms Zurcas.
She said impact on guests should be minimal.
Inside, the hotel will also be installing a lift to upstairs rooms.