An overhaul of the shuttered state lobster hatchery in Oak Bluffs has been approved by the Massachusetts Division of Marine Fisheries, and the commonwealth will now invest a significant sum of money to rehabilitate the facility for use by the Martha’s Vineyard Shellfish Group, Cape and Islands Rep. Timothy Madden announced yesterday.

Mr. Madden said the state DMF has agreed to invest at least $250,000 in the project in phases. Work began this week to replace the plumbing in the old hatchery that sits on the eastern side of the Lagoon Pond in Oak Bluffs.

Once a vibrant center for marine biology research and education where half a million baby lobsters were raised each year and 10,000 visitors came every summer, the hatchery has been closed for 15 years. It is currently used for storage and office space by the state.

Mr. Madden said the move to revive the hatchery was sparked by a story in the Gazette in January 2010 that chronicled the crumbling facility. The plan has proceeded in fits and starts in the usual tangle of politics on Beacon Hill, since then, he said.

“I learned about it from you guys,” Mr. Madden told the Gazette yesterday from the state house where he was locked in the wrangling among lawmakers over the final budget session of the legislature. “I read the article in the paper two or two and half years ago and we decided to put a line item in the [state] budget for the hatchery,” he said. “Needless to say it didn’t end up in the budget but it got everybody’s attention. We just kept pushing, and then we came down and made a site visit and were so impressed by what they are doing in the small facility [owned by the shellfish group]. I will say as much as anything the morale and enthusiasm on the Vineyard to do this is so strong that it became a priority to see it through.”

Mr. Madden said the DMF will come to the Vineyard at some point in the near future to make a more formal announcement about the plans for the hatchery.

The project is expected to be a boost for the burgeoning aquaculture movement on the Vineyard led by the shellfish group which operates a small solar hatchery on the opposite side of the Lagoon. The shellfish group’s longtime executive director, Rick Karney, greeted the news with cautious optimism.

“I think it is definitely an opportunity for the future on the Island, to get a foothold in there, although we are going to have to come up with extra money for staff,” Mr. Karney said. The shellfish group raises millions of shellfish every year for seeding in Island ponds. Mr. Karney said his hatchery just finished putting out six and a half million quahaugs in Island ponds and currently has seven or eight million scallops in its hatchery. Once the scallops are put out, the hatchery will spawn oysters for seeding in the Great Ponds.

The hatchery has a modest operating budget supported by contributions from Island towns and fund-raising.

“This is something I hope will be the first step in the building with more to come over the years,” Mr. Madden said. “It’s an opportunity to broaden the shellfish propagation work that the shellfish group is doing — very important work. I’m very excited about this.”

He said the project has the backing of DMF director Paul Diodati.

Mr. Karney said the original plan called for having the facility overhauled by July, but he said the more realistic timetable will probably be next spring. “At the very least we would like to do some scallop nursery work there, that would be pretty easy for us to do and it would be high visibility for the Vineyard . . . if we had more space we would be able to keep more animals. But some of that is dependant on funding [for staff],” Mr. Karney said, concluding:

“But yes, this is a really good thing.”