Vic gives $2bn to build new Vic toll road

Victoria will spend $2 billion to build a new toll road after Canberra rejected a request for federal funding.

Construction of the $5.5 billion Western Distributor will start in 2017, local motorists paying for the rest of it with tolls extended until 2045.

"Malcolm Turnbull made it very clear he's not interested in being a partner in this project. Well, this project simply cannot wait," Premier Daniel Andrews told reporters on Thursday.

The original business case called for $1.9 billion from Canberra, but the federal government wanted a concessional loan, rather than a direct grant.

"The construction sector in our state needs the certainty that this is a real project," Mr Andrews said.

"I'm not going to be waiting, hanging out for Malcolm Turnbull to borrow money to then relend it to us."

Transurban chief executive Scott Charlton said the project would deliver $11 billion in productivity improvements for the state.

"We think it's good value for the state of Victoria and it's good value for our shareholders," he said.

While the project is subject to final negotiations, the premier expected tolls would be extended on CityLink and EastLink until 2045.

Federal Major Projects Minister Paul Fletcher said the announcement vindicated the federal government's call not to commit money.

"Because its economics are underpinned by tolls, both on the new components and through an extension of the CityLink toll concession, it is not a project which requires grant funding from the Commonwealth," Mr Fletcher said.

Opposition leader Matthew Guy said motorists from Melbourne's south, east and north would be subsidising for decades a road they might never use.

"The only people who are going to benefit out of this road announcement today, directly, are the shareholders of Transurban," Mr Guy said.

Greens MP Colleen Hartland said $2 billion had been set aside for a project that was still "squiggly lines on a map".

"I can think of five other major projects in the western suburbs that could be done for this money," Ms Hartland told reporters.

The Victorian Chamber of Commerce and Industry and the RACV said a second river crossing was essential for taking pressure off the West Gate Bridge.

Residents will be able to have their say on the latest design options through a community consultation starting on April 16.