The Rudd Labor Government will contribute $2.5 million towards the new community hall and library building in Pakenham, in Victoria.

Minister for Infrastructure, Regional Development and Local Government, Anthony Albanese, announced the funding as part of Community Cabinet in Pakenham today, with the Mayor of Cardinia Shire Council, Bill Pearson.

The overall project will replace the existing library, which reached its capacity in 2001, and the 1950s-era wooden community hall built in a bushfire-prone area.

The new building will also deliver an appropriate facility that can be used for emergency and bushfire relief operations.

The Pakenham Hall and Library Redevelopment is part of the RB Ronald Reserve Master Plan, which will help cater for a growing population and deliver a modern building that meets environmental standards.

The existing wooden Pakenham Hall will be replaced with a building that will house a library, as well as five meeting room spaces, a multi-purpose hall with function and stage area and a large community kitchen.

Federal funding is part of the $800 million Regional and Local Community Infrastructure Program - the largest one-off investment in local infrastructure in Australia's history.

The Government's nation building economic stimulus plan is investing in local projects to support jobs and economies during the global recession.

Pakenham had a population of just over 7,100 residents in 1991, when the original library was built.

Under the Victorian Government's Melbourne 2030 plan, the Pakenham community is expected to grow to more than seven times that number - over 51,000 -- by 2031.

The funding announced today builds on $1.16 million that the Government has already delivered for five local infrastructure projects in the Cardinia Shire.

Nearly 70 per cent of the economic stimulus plan is infrastructure with construction projects already underway.

More than 3,000 projects are being funded through the Government's Regional and Local Community Infrastructure Program across Australia to support local jobs and deliver long-lasting benefits to communities.