The farming district of Kardella is situated in the South Gippsland hills, 12 km east of Korumburra and 127 km south-east of Melbourne.
The hilly and densely forested land was selected in the early 1880s. Roads were surveyed but development was slow. The railway line from Melbourne into South Gippsland was constructed through the area in 1891. Kardella, an Aboriginal word thought to mean possum, was chosen by the Railway Commissioners from several submissions to name the railway station.