In 1885, following the initiative of Mr James Oddie, the Government reserved three acres (about 1.2 hectares) in Cobden Street at Mount Pleasant, for an observatory, and in March 1886, a committee was appointed for the care, protection and management of the reserve. Oddie made the observatory possible through his enthusiasm for science and his philanthropy. When Oddie established the Observatory, he invited Captain Baker, a retired sea captain to become the first Superintendent.
On the 11th May, 1886, the formal opening of a small observatory with a 12.5-inch (32cm) reflector, transit room and cottage took place. This telescope, the first used at the Ballarat Observatory, was made by Captain Baker some years before he moved to Ballarat from Goldsborough, and which won a silver medal at the 1873 Melbourne Exhibition. Captain Baker built a workshop and foundry, and constructed a number of telescopes on site. Captain Baker also gave astronomy lectures and provided viewing opportunities. As Captain Baker was an expert telescope maker, he was chosen to polish the mirror of the 48-inch (122cm) Great Melbourne Telescope at the Melbourne Observatory in 1888, and his greatest instrument, the 26-inch “Great Equatorial Telescope”, is still in use. After Captain Baker’s death in 1890 and the financial depression of the ’90s which bankrupted Oddie, the Observatory suffered a period of neglect. John Brittain a lecturer in astronomy at the School of Mines, rekindled public interest in the Observatory and persuaded the Town of Ballaarat East to take responsibility for it.