The Bulldogs will buy and operate the RSL premises in Noel Street, Dromana, where it has been since 1963, and allow the RSL to function on a limited basis.

The building will become the AFL club's new Mornington Peninsula base.

Western Bulldogs chief executive Campbell Rose said the club was delighted to support the 800 members of the RSL and "help breathe life back into the venue".

"The venue will also service the local community as a community-based organisation."

The Bulldogs hoped to open next week and other clubs would be invited to use the premises.

"Appropriate building permits and licences will then be sought before the venue is closed for about a week for minor renovations ahead of the summer holiday period," Rose said.

"We have a rapidly expanding member and supporter base on the peninsula and this proposal will allow the club to commit to long-term community development in the region."

Bulldogs president David Smorgon said: "We are very excited about developing the existing facility into a real community hub for locals."

Kangerong Ward councillor Graham Pittock said it was exciting news. "The Bulldogs are not doing this to make money but to expand their supporter base."

He said the RSL would not be a full service sub-branch but would mark major events such as Anzac Day and continue running its much-praised scholarship program for primary and secondary school students.

Its members last financial year volunteered 3400 hours for home and hospital visits, respite care and transport for senior citizens.

Cr Pittock said it was a wonderful early birthday present for Dromana, which celebrates its 150th anniversary of founding next year.

Dromana RSL has had a rotten year after being told in early March by RSL state headquarters that it had to come up with $200,000 by March 23 to repay debts or close down.

The sub-branch was the latest peninsula RSL to face forced closure, with Sorrento-Portsea closing in November 2007 with debts of about $150,000, but being rescued in early 2008, and Mornington being saved the same year.

Factors leading to the Dromana-Red Hill debt included high costs associated with running the gaming room and extensions made to the members' bar and gaming room in 2008.

The RSL staved off closure for about four months but was finally forced to lock its doors in July.