Five piles of demolition waste has been dumped in the Wookarung Regional Park, with Parks Victoria confirming asbestos is among the piles of waste.
The dumping occurred along Dozed Track and Boak Road in the park, suspected to be some time around February 18.
An exclusion zone has been set up along some of the piles of rubbish, with hikers being urged to avoid the areas.
Parks Victoria is investigating the origin of the materials, with the organisation calling on the public to provide information.
Since January 2022, Parks Victoria has removed 169 illegal or "legacy" asbestos dumps across the state.
The clean-up of the rubbish dump will commence along with other sites of concern across the state, though it is unclear when that may be.
"Dumped asbestos is unfortunately a common and major concern across well-loved parks and reserves in Victoria," Parks Victoria acting area chief ranger Alex Schipperen said.
"Removing waste is a significant expense for Parks Victoria and it takes rangers away from what should be their core work — maintaining facilities and protecting plants [and] animals, and historical and cultural sites.
"It can also lead to temporary closure of parts of a park for clean-up."
Jeff Rootes is the secretary of local environmental group Friends of the Canadian Corridor.
He first alerted the EPA and Parks Victoria about the dumping in late February.
"The materials were very old, like an old shed, wood, and painted a lime green colour, along with a lot of old furniture, and a lot of very sandy soil, which is quite unusual," Mr Rootes said.
Mr Rootes echoed Parks Victoria's concerns about illegal dumping activity.
"There has been a lot of household rubbish — particularly this year — that has been dumped in Wookarung park. Stuff that is unhealthy," he said.
He added dumping was a "basic human behaviour", and called for better environmental education and better patrols in our forests.
"Education is always the first point — getting people to realise the consequences," he said.
"We urge the agencies to investigate these dumps as best they can — unfortunately, there isn't enough evidence to prosecute.
"But where they can prosecute, they should."
Director of development and growth at the City of Ballarat, Natalie Robertson, said the council does receive reports of dumped rubbish.
"Where possible, the City of Ballarat works with Parks Victoria and the EPA to ascertain where the dumped rubbish has come from and takes appropriate actions in accordance with the Environment Protection Act," she said.