Victorian Premier Steve Bracks declared a second gold rush in the state, officially opening a new mine in Bendigo in central Victoria.

Mr Bracks said the mine at its peak would produce more than 600,000 ounces of gold per year, making it the third largest gold mine in Australia.

"This is going to be a great second gold rush for central Victoria," he told reporters at the mine.

"There's going to be a great benefit, about $350 million extra in the economy, because of this gold mine."

Bendigo Mining currently employs 230 people on the project, which is expected to rise to 580 at its peak.

The mine will be developed in two phases, with Kangaroo Flat producing gold from 2006 and an Eaglehawk site starting operations after 2011.

Bendigo was a centre of the Victorian gold rush of the 1850s and yielded more than 20 million ounces of gold between 1851 and 1954.