"We want the government to establish a regional transition scheme for the Latrobe Valley," said Geoff Dyke, Victorian branch secretary of the mining and energy division of the CFMEU.

"What we want is an industry-wide scheme where the older workers at the newer power stations are given an incentive to retire early, and that the younger workers at the Hazelwood power station can take up their positions," he said.

"So it's basically a re-deployment scheme across the region. Now the advantage of that is that the older workers would probably retire in the valley and contribute to the community with their superannuation.

."And the younger workers would remain living in the Latrobe Valley rather than having to look for work interstate."

Mr Dyke said workers wanted "practical" outcomes. Well paid power industry workers did not want to be retrained only to then move into low paid jobs, he said.

If the only option for workers who are now well paid was a new low paid job, they would look for work interstate and leave, he warned.

"At the moment we are facing 1000 job losses.

"A lot of them may retire, take redundancy and retire, say about a third. We would expect about two-thirds of them to be looking for work.

"Now if we could redeploy at least half of those people we can halve the impact," he said.

"Now we probably can't address the full impact, but if we can halve the impact that's a very significant thing.

"Unemployment in Morwell is already 19 per cent, and it's about 15 per cent in Moe. We don't want to have this impact on top," he said.

Secretary of the Gippsland Trades and Labour Council, Steve Dodd, said the group backed the CFMEU plan.

"I think it could save some of those jobs, I do believe that. It's going to be a big hit when it happens, but I think if we adopt the plan that the CFMEU are talking about that will mitigate the damage to a certain degree," he said.

"But the bottom line is pretty simple and you can't sugarcoat this. There's 1000 jobs that are going to go down the drain," he said.

To bring the CFMEU proposal to life the union is calling for co-operation from the state and federal governments and operators of other local coal mines and power stations.

Apart from Hazelwood the Latrobe Valley is also home to the Loy Yang and Yallourn brown coal mines and their associated power stations.

But the ownership structure of the industry could be a challenge to the proposal. The Yallourn Power Station and coal mine is owned by Energy Australia, while AGL owns the Loy Yang A Power Station and Loy Yang coal mine near Traralgon.

Engie, the owner of Hazelwood, owns the Loy Yang B power station.

Former power station worker Graeme Middlemiss said the CFMEU proposal was a "logical" plan.

"The key advantage of this plan is that those people who wish to continue working in the industry would be given the opportunity to do so at other power and mining companies;" Mr Middlemiss said.

"The younger workers would be able to continue their careers, whilst those close to retirement would be encouraged to do so," he said.

An announcement about the future of Hazelwood is expected soon.