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The Doncaster region was settled in the 1860s and 1870s, predominantly by German settler orchardists. The German community was named Waldau, but the name Doncaster gradually became commonly accepted. A Lutheran church was the first one in Doncaster in 1858. A Lutheran school opened in 1860 and a denominational school in 1861. Doncaster Post Office opened on 17 May 1860.
Schramm's Cottage, an historic stone cottage originally located in Doncaster Road (at the site of the fountain next to the Municipal Offices), was relocated to the site of the original Lutheran Church building in Victoria Street in the 1970s. The remains of the Waldau Cemetery, where approximately 150 burials took place between 1853 and 1888, are located in the grounds of Schramm's Cottage.
In the 1880s an observation tower (285 ft high) was constructed on Doncaster Hill, which attracted day-trippers to (what was then) the countryside.
Doncaster was the location of the first electric tram to run in Melbourne in 1889. The tram started in Doncaster and ended in Box Hill (about 3.5 km away). Consequently, this was named "Tram Road". However, the service did not earn any profit, so it ended in 1896 due to feuds with land holders and financial problems. The main road through the suburb, Doncaster Road, was formally named Main Street.
Doncaster remained an orchard area until the 1970s, with the majority of houses built from the 1950s to the 1980s.
Doncaster is approx. 17km East of Melbourne's CBD and is part of the City of Manningham. At the 2011 Census, Doncaster had a population of 18,359.
The suburb consists of a central area along the top of Doncaster Hill, which includes several historical buildings along Doncaster Road, the Westfield Doncaster Shopping Centre and surrounding high-rise apartments, while the rest of the suburb is typical of many of Melbourne's eastern suburbs, with extensive low-density housing.
Today the suburb is perhaps most notable for its shopping centre, one of the largest in Australia.
Bus services exist in the area running from a park+ride centre, along dedicated transit lanes to the city.
Schools located in Doncaster are:
- Doncaster Secondary College
- Birralee Primary School
- St. Gregory the Great Primary School
- Doncaster Primary School