A $33.5 million federal package for heritage upgrades included $3 million for the chalet.

It adds to $3.2 million previously committed by the Victorian government, including $1.5 million for eco-pods in the national park.

The chalet has been mothballed for more than 12 years, since a fire claimed a sister ski lodge on the mountain.

Parks Victoria is planning to launch an expression of interest process before the end of 2020 for operators to provide a cafe experience in the front section of the chalet.

Eastern Region regional director Chris Corbell welcomed the federal funding.

"The $3 million grant from the Commonwealth government will fund conservation works to further repair and protect the Chalet facade, and ensure a wind and watertight external building envelope, compliant with Victorian heritage building regulations," he said.

"The Victorian government is investing in a range of infrastructure improvements to strengthen Mount Buffalo National Park."

Alpine Council chief executive Charlie Bird was not given a timeframe on the new conservation works, but said they would stimulate the local economy.

"We welcome the positive news today, celebrate the hard work of many over many years, and look forward to the further restoration and reactivation of the chalet," he said.

Mount Buffalo Destination Advisory Group member David Jacobson said heritage works would complement the intended cafe offering.

"The reason for the temporary cafe going in the living rooms at the front and utilising the bar as a temporary kitchen was because the future of the North Wing ... really needs to be put under the microscope by designers, engineers and architects," he said.

"We're thrilled to see the levels of government working together." The group's 'Vision for Mount Buffalo', anticipating a day lodge and hospitality offering in the former Manfield's Cafe, was subject of a $200,000 PricewaterhouseCoopers feasibility report.

Alpine Council's bid to secure $1.8 million in state government funds for a cafe by putting $200,000 on the table pre-election in 2018 was unsuccessful, with the EOI announced in May being the first formal response to the PwC report.

Sean Hallam, who opposed demolition plans for parts of the chalet in 2014 and runs a Facebook page, said adhoc funding injections distracted from the need for substantial investment.

"Putting the cafe at the front while the rest of the building is dormant is not sustainable or viable," he said.