The Y-shaped deposit was found with a hand-held metal detector at a depth of a little over 60 centimetres, according to a video of the find posted on YouTube.
"The prospector said it sounded like the bonnet of a car through the headphones," wrote TroyAurum, who uploaded the video.
"It was lying flat (broad side up) and he carefully dug it up."
The find, made on Wednesday at a popular prospecting site outside Ballarat 110 kilometres from Melbourne, was confirmed by the owner of the town's gold shop, Cordell Kent.
"A lot of people think Victoria's goldfields are dead and that there's none left, but he (the prospector) has worked in an area where a lot of people have worked in the past but he persisted and he's been rewarded," said Kent, of the Mining Exchange Gold Shop.
Kent said the 177-ounce nugget, which he was working to find a buyer for, was among the biggest he had seen in 20 years in the gold business.
"We have 800 prospectors on our books and only a couple of those have ever found a nugget over 100 ounces," he said, adding that the sum total of his own finds was little more than 100 ounces.
"There's only been one or two big pieces and they were found a long time ago."
Kent said the nugget was expected to fetch more than Aus$300,000. The prospector wished to remain anonymous.
Ballarat and its surroundings were a key site in Australia's gold rush in the mid-1800s, which brought a flood of migrants and transformed the economy.
