Mechanics' Institutes were educational establishments formed to provide adult education or 'libraries for the adult working class’, and provided them with an alternative pastime to gambling and drinking in pubs. The concept of Mechanics Institute originated in the United Kingdom with the first one being incorporated in Glasgow in November 1823. By the mid-19th century, there were over 700 institutes in towns and cities across the UK and the world, some of which became the early roots of other colleges and universities. In Australia, the first Mechanics' Institute appeared in Hobart in 1827. The Melbourne Mechanics' Institute was established in 1839 (renamed The Melbourne Athenaeum in 1873) and from the 1850s, Mechanics' Institutes quickly spread throughout Victoria wherever a hall, library or school was needed. Over 1,200 Mechanics' Institutes were built in Victoria but just over 500 remain today, and only six still operate their lending library services.

In May 1866, the township of Stringer's Creek had been surveyed and renamed Walhalla, after one of the most prosperous mines then working. The Walhalla Mechanics' Institute and Free Library opened in 1867. It also operated as a private school in its early years. The building was destroyed in the “Great Walhalla Fire” in 1888, which destroyed the centre of the town and the priceless collection of books and memorabilia from Walhalla’s early history. The Mechanics Hall was rebuilt, but after all the mines closed by 1915, fell into disrepair. It was again destroyed by fire in 1944. It was again rebuilt (with a slightly different alignment) in the 1980's by a dedicated team of volunteers, Army apprentices and work details from the Office of Corrections (“The Naughty Boys”).

Today, the building is owned by the people of Victoria and managed by the Walhalla Board of Management on their behalf. The building has three shops, a hall with a kitchen, a billiard room (with a billiard table), an extensive library, an office, a fire vault, a single bedroom unit (known as Creek Cottage) with a separate bathroom and kitchen plus two storage rooms.

Both the hall and Creek Cottage are available for hire by the general public. The shops are leased and operated as small businesses, dependent upon the ever increasing tourism trade in Walhalla. See details of the Hall hire rates (as at May2011)