A two-kilogram gold nugget worth up to $160,000 has been discovered by a lucky retiree.

The incredible find was made in the outskirts of Ballarat in Victoria on Friday.

Mark Day, a prospecting gear supplier from Gold Ballarat, said it was the biggest nugget he'd heard of in decades.

The nugget (pictured) was found by a man, who wished to remain anonymous, in the outskirts of Ballarat on Friday

'I've been in this business for 25 years and this is the biggest find we have seen by one of our customers - that they've told me about anyway,' he said.

The man had been searching in old pastureland with a detector when the buzzer went off.

After he discovered a .22 lead bullet, he was about to give up when the buzzer continued to beep.

He kept digging further and uncovered the gold about a metre into the dirt.

Collectors have allegedly already offered the man $160,000 for it - but he has yet to sell it

Mr Day said he was shocked to hear of the size of the nugget, insisting the man, who was a regular customer of his, bring it in for him to see.

'When he showed me the nugget here in the store he was shaking like a leaf. He didn't know what to do with it. He hadn't slept in three days.'

Buyers have reportedly already offered the man $160,000 for the nugget.

But Mr Day says the lucky prospector won't stop there. He says the man has already purchased a new top-shelf detector and will be returning to the same area in the bush to look for more gold.

'He certainly thinks there's more gold out there. And after this, who can say he's wrong?' he said.

The retiree has already purchased a new top-shelf detector and will be returning to the same area in the Ballarat bushland (pictured) to look for more gold