High Quality Content by WIKIPEDIA articles! Colac is a small city located in the Western District of Victoria, Australia, situated 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.