The settlement at Colac, one of the earlier townships in the Port Phillip district, emerged around a coaching inn which was established in 1844 at the southern end of the lake (at what is now the corner of Hesse and Murray Streets).The site was surveyed in 1844 and small plots of land were made available the following year when a general store and blacksmith's were established.
Morongo valley dating
He built his first homestead in what is now Chapel St in 1840 and the town's main street is named in his honour.
It was also in 1837 that the explorers Joseph Gellibrand and George Hesse, of the Port Phillip Association, went missing in the area.
A national school was established at East Colac in 1850, along with a second general store, the Colac Hotel and a brickmaking works.
The following year the population was recorded as 672.
Other settlers of note were Alexander Dennis and John Calvert who established the 'Warncoort' and 'Irrewarra' runs respectively in 1840.
These men established very substantial pastoral enterprises, built impressive homesteads (some still stand today), played important roles in the early European settlement of the area and made significant contributions to the country's pastoral history.
The first European in the area was pastoralist Hugh Murray who disembarked at Geelong in 1837 with his sheep and horses and other pastoralists who headed west together.
Thomas Austin stopped at what is now Winchelsea while Murray continued west, settling adjacent Barongarook Creek on the southern shore of Lake Colac later in 1837.
The fertile soil has rendered it a highly productive agricultural, pastoral and dairying district noted for its onions, potatoes, cattle, pigs, poultry, sheep and milk products.