A diversion in the river's course, called the Lerderderg River diversion tunnel, located approximately 25 kilometres (16 mi) upriver from Bacchus Marsh, was constructed between 1855 and 1870. The tunnel was driven through a mountain spur in a horseshoe bend, diverting the river, and allowing the exposed river bed to be sluiced for alluvial gold.
The river is known for the Lerderderg Gorge Picnic Ground, camping, bushwalking, and fishing. In earlier days, gold was mined in the upper reaches, and some of the old mines (considered dangerous to enter) can be seen as you travel along the sluice on the east bank, which previously fed into those mines. The water has slowed down to a trickle for the past few years[when?] because of a severe drought, but there are still a few popular swimming spots along the river, including "Harry's Hole", "Third Hole", and "The Pit", all of which are in the Lerderderg Gorge.