The former Target Country building in Gilgandra's main street will be transformed into a community hub.
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The project will be assisted by a $1.47 million grant under the Federal Government's Building Better Regions Fund.
Gilgandra Shire Council mayor Doug Batten said through the initiative they were able to achieve an innovative hub in the heart of the town.
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"The Library and Community Hub project will offer our community access to learning and social connection opportunities that will have significant benefits for our region.
"We are pleased that through the larger space we'll be in a position to expand the services we currently provide and offer new interactive digital technologies.
"Our community was hit hard by the closure of Target Country in the middle of 2019. This project is such a positive for the community and we are confident it will bring more people to Gilgandra."
Federal Member for Parkes Mark Coulton said the precinct will be a terrific drawcard for both Gilgandra locals and visitors to the region.
"'The Gil' is an exciting initiative which will help to revamp the main street of Gilgandra and attract more visitors to the area," Mr Coulton said.
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