A huge 5.5kg gold nugget worth more than $300,000 has been unearthed in central Victoria.

A mystery prospector made the 'extremely rare' discovery in Ballarat yesterday using a high-tech metal detector he bought just a few months ago.

Ballarat gold dealer Cordell Kent said the 177 ounce treasure is the largest nugget found in the region for decades.

"Ive been prospecting for over 20 years and I've never found anything this big," he told Seven News.

"I hope to but the reality is it's very hard to do."

The whopper nugget was discovered under a pile of leaf mulch at a depth of 60cm on Wednesday.

With the price of gold at $1600 an ounce and an added premium due to its rarity, the nugget has been valued at more than $300,000.

Mr Kent added: "This gives prospectors, current and future, enthusiasm to go out and know that there's still a chance they could strike it lucky and find a fortune in gold."

A video of the nugget has been posted on video sharing website YouTube.

A monster gold nugget weighing 3.66kg was discovered in the same region last year.