Member for the Bathurst electorate, Paul Toole, announced a Community Building Partnership grant of $16,000 for the addition.

The state MP said the funding would allow for the coffee shop fit-out including seating, bench tops and work surfaces, refrigeration, electrical and plumbing works and appliances.

Museum president Buzz Sanderson said that in addition to providing another source of revenue for the community, volunteer-run organisation beyond the entry fee at the door, the coffee shop will enable them to offer more to their guests.

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"It is fantastic to have this extra financial support to be able to do this, because it really will make very much a material difference to the visitor experience of the Museum," he said.

"There are three things people expect from these places; to be able to enter by waving a credit card; for it to be air-conditioned; and to be able to buy a coffee. And it's a way to make that stay longer and to make a visit to the Museum a better deal.

"It's all about enriching that visitor experience for the Mudgee region. And we're hoping to have it up and running very early next year."

Earlier this year the NSW Government announced a $2000 grant for the museum through the Volunteer Museum Small Grants Program.

The purpose of the funding was for the upgrade of storage areas with metal shelving to replace old timber shelving for archive boxes that hold documents, photographs and small objects.

Mr Toole said that such funding is important to enable the museum to bring much-needed improvements to everyday operations.

"Funding like this is essential because it gives our local cultural venues the chance to make improvements that may not happen otherwise,"he said.

"It's important to give these venues every chance to succeed in making the small improvements that can have big impacts on the experience for its visitors and volunteers.

"I congratulate Buzz Sanderson and his team of helpers at the Kandos Museum.

"It really is a great little tourist attraction with an impressive range of exhibits that tells the story of the region and its rich past."