Shanagolden Village has one of the last remnants of rare Gippsland Plains Grassland, a treeless ecosystem dominated by native grasses such as Kangaroo Grass with many herbs and wildflowers.  This vegetation type is considered endangered in Victoria and Australia because so little remains.

Gippsland Plains Grassland used to occur across most of western and central Gippsland, but there are now only a few dozen hectares left at best.  Another important grassland reserve, which is managed by Cardinia Shire Council, occurs just a kilometre to the east of Shanagolden Village.

When Shanagolden Village was originally developed it was required that this small patch remain, due to its rarity and ecological significance.  Shanagolden Village is required to protect and manage it for conservation objectives, including limited mowing and weed control.  A comprehensive management plan has been developed to guide works in the reserve.

Gippsland Plain Grassland occurs in wet easily waterlogged soils and contains a diversity of native grasses and colourful wildflowers. 

Management works are ongoing and include planting formerly missing native wildflowers to increase the flora diversity and add colour where weed control creates spaces for new indigenous plants.