Colac is a small city in the Western District of Victoria, Australia, approximately 150 kilometres south-west of Melbourne on the southern shore of Lake Colac and the surrounding volcanic plains, approximately 40 km inland from Bass Strait. Colac is the largest city in and administrative centre of the Colac Otway Shire. At the 2006 census, Colac had a population of 10,857.
A commercial centre for a major agricultural district, it was named after nearby Lake Colac and was proclaimed a city in 1960.
For thousands of years clans of the Gulidjan people occupied the region of Colac, living a semi-nomadic life.
The area was first settled by Europeans in 1837 by Hugh Murray, and proclaimed a town, Lake Colac, in 1848.
The Post Office opened on 1 July 1848 as Lake Colac and was renamed Colac in 1854. Colac Botanic Gardens in Queen Street located on the shores of Lake Colac, were established in 1868.
In 1854 town founder Hugh Murray employed a couple of shepherds named Thomas Brookhouse and Patrick Geary. Brookhouse who was looking for missing sheep disappeared without a trace. Patrick Geary and his wife soon left the district. Fifteen years later a boy out rabbiting found the skeletal remains of Thomas Brookhouse under a pile of rocks near Lake Corangamite. Brookhouse had his head smashed in. It took Police two years to track Patrick Geary and charge him with Brookhouse's murder. A friend of Geary told the court that Geary had killed Brookhouse with an axe to stop him from informing Murray of Geary's sheep stealing activities. Geary was hanged in Melbourne in 1871.