Mrs Craig said the re-development would be the biggest public building project in Greytown since the town hall makeover and would increase public awareness of the museum, which includes six heritage buildings and exhibits dating back to the 19th century.
The makeover would help not only to ensure a sustainable visitor attraction for Wairarapa but also encourage "a sense of belonging and pride in our community", Mrs Craig said.
Cobblestones is on the site of the original Hastwell Stables, a Cobb & Co mail and passenger service between Wellington and Wairarapa that was run by the Hastwell family from 1866.
Historic buildings on the site include a colonial cottage, Wairarapa's first public hospital, the district's first Methodist church, the Donald woolshed and an old schoolhouse.
Equipment dating back to horse-drawn times includes gigs and tradesmen's vehicles.
The trust hopes the makeover of Cobblestones will triple visitor numbers from around the 3000 visitors it now attracts in a year.
Mrs Craig said the project would also allow for specialist storage facilities to be built and for better management tools, including cataloguing, to help and protect the integrity of the museum's collection.
Cobblestones Early Settlers Museum started in 1969 when launched by Greytown Jaycees, with former Greytown TAB manager Don Knight being a driving force.
Apart from the donation to Cobblestones, the Eastern and Central Trust has also granted money to the Wairarapa Workforce Trust, Whatman Kindergarten and Pirinoa Playcentre. The work force trust will receive $8000 to support its work identifying job opportunities and for other uses connected to its role of ensuring the quality and quantity of Wairarapa's labour force.
Whatman Kindergarten has earmarked its $3500 donation for new equipment following its relocation to new premises and Pirinoa Playcentre plans to spend its grant of $1000 replacing second-hand and ageing furniture.