The Melbourne Convention and Exhibition Centre, nicknamed Jeff's Shed after former premier Jeff Kennett, will grow by up to 10,000 square metres, or 30 per cent, under initial expansion plans announced by the state government.

A new building would be built on a car park in South Wharf between the current exhibition centre and the West Gate Freeway overpass.

Premier Denis Napthine said the state government would begin negotiating on a public-private partnership with its convention centre partner Plenary.

The negotiations are expected to take six months. Dr Napthine said he expected the centre would be open by the end of the decade.

Dr Napthine did not specify how much the state government would contribute to the expansion, saying any funding would hinge on the negotiations.

But he did say there was an "envelope" budget of $350 million for the expansion.

"This is a great opportunity to expand the exhibition space, to expand the capacity of the centre to deliver greater conventions, more exhibitions, more dollars, more jobs and a greater boost for Melbourne and Victoria," he said.

The expanded facilities will include a new 250-room hotel, extra car parking and more retail outlets.

Business events contribute $1.2 billion of economic benefits to Victoria each year, the state government said.

Last year the convention centre held 1030 events, attracting more than 680,000 delegates.

Tourism Minister Louise Asher said the existing centre was in high demand, turning away 20 per cent of business.

Opposition spokesman Martin Pakula said the Coalition had made similar promises before the last election.

"Four years later, 11 days before we go into caretaker mode they want Victorians to believe they are in negotiations for an expansion," he said.

"If the government was serious about this they would have entered into negotiations months and months ago."