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Mount Gambier, City Centre intro. Mount Gambier is situated in South Australia and is famous for its volcanic landscape and Blue Lake. This city, which is the largest in South Australia, is located between the cities of Melbourne and Adelaide, making it easy to reach. The major attractions here are natural, and include the Valley Lake Wildlife Park and Blue Lake. The Blue Lake is, as the name suggests, an incredibly vivid blue volcanic lake. The park is home to many underwater caves, which are popular with those interested in spelunking. There are also plenty of caves to explore, without having to dive, such as Hells Hole and Alexandra Cave. The main landmark in the city centre is the Old Town Hall, which dates back to 1882. Motor racing fans should not miss a visit to the McNamara Park, about eight kilometres outside the city limits to the west. Most of the Mount Gambier city center hotels are located around the train station, in and around Bay Road.