Forensic officers will on Monday begin excavating a site between Granton and New Norfolk, alongside the Lyell Highway.

Inspector David Plumpton said he had credible information to suggest Miss Butterworth's remains were dumped in the immediate area of what was in 1969 a roadside car park.

"We now intend to excavate this whole area and conduct lengthy forensic investigations in an effort to locate - hopefully - those remains," he said.

"And if not, some evidence that Lucille was left here by the person we believe took her life back in August, 1969."

Miss Butterworth disappeared from a Claremont bus stop in August 1969, where she was waiting for a New Norfolk-bound bus.

Police believe a man who stopped to offer her a lift is responsible for her murder.

This latest breakthrough, which prompted the dig, relates to a man who remains a person of interest in her disappearance.

Police will not say whether it is the same man arrested and released last year in relation to the 46-year-old case.

The site will, from 7am Monday, be excavated with heavy machinery, right back to the banks of the river about 40 metres away.

''We will then hand-sift through all of that material over a lengthy period of time,'' Inspector Plumpton said.

''This will rely heavily on physical labour and sivving dirt.''

Inspector Plumpton said up to 10 officers will be engaged in the dig at any one time.

"It could take anywhere between two and three weeks before we have some reasonable and reliable belief as to the capacity for us to locate any remains," he said.

Inspector Plumpton considers the development very significant.

"To us it is significant in the form of a major development in our investigation," he said.

"To the family it is extremely significant; it won't give them closure, but the opportunity to return remains or something to them, so they can have a family burial, is extremely significant.

"Hopefully we will find something that gives them partial closure."

The evidence will form part of a coronial inquest into Ms Butterworth's murder, which is scheduled to start on August 31.