Indigenous Elders and the community near Ararat in south-west Victoria have been shattered by reports of damage to a sacred site in south-west Victoria.
In a statement issued on Tuesday, Aboriginal Victoria said it was aware of allegations of harm to the Kuyang Stone Arrangement.
"It is an offence to cause harm to Aboriginal cultural heritage under the Aboriginal Heritage Act and substantial penalties can apply," it said.
A site visit will take place on Tuesday as authorities investigate the destruction.
Locals in the area said they were shocked at the damage, saying the Kuyang Stone arrangement was a site of great cultural significance.
"We're devastated," Lake Bolac resident Una Allender said.
An aerial image of the site shared by musician Neil Murray on social media showed the eel shaped alignment.
"It is well-known," Mr Murray said about the location on ABC Radio Tuesday morning. The Lake Bolac eel festival will be held in 2022.
Tony Goodfellow from nearby Ballarat has described the site as a gem and amazing.
"The desecration connects to a broader narrative around other sites being destroyed and the need for federal framework protection," he said.
The environmental campaigner said it showed a lack of care and knowledge about Aboriginal culture and history.