A lobby group has revealed it is about to finalise plans to duplicate the Dennington to Illowa section of the highway that it says will provide the biggest bang for buck.

The federal government announced $60 million for works between Warrnambool and Port Fairy in May, and Princes Highway West Action Alliance spokesman Trev Greenberger said the group had prepared a design for a duplication between Illowa and Southern Cross roads.

The duplication of the four-kilometre stretch of highway would require approval from the state government, which would deliver the upgrades.

Mr Greenberger said the alliance's design showed the duplication did not require land acquisition.

"Because of the road reserve and the existing roadway you're going to get more value for money if you start the duplication at that point," he said.

"We will have the concept design finalised in September. We will be speaking to the state government representatives about our concept plans, so the planning for the works can start immediately."

A state government spokeswoman said it was waiting for the federal government to complete a Princes Highway Corridor Strategy, which covers multiple states, to "identify the most appropriate upgrade opportunities".

Federal Liberal Wannon MP Dan Tehan said the strategy was due this month, but he had requested the state government to "get on and do what they want to do".

The alliance has lobbied for duplication of the highway between Warrnambool and Port Fairy, but Mr Greenberger said land restrictions at other sections meant the alliance was open to overtaking lanes or a two-plus-one solution. He said upgrades to the Tower Hill entrance were among the alliance's "next bundle of priorities".

Another priority, the highway's 'blue church' intersection in Nalangil, is receiving sensor technology that changes the speed limit when a car approaches from the Timboon-Colac Road.

Scott Lawrence, a Regional Roads Victoria director, said the work near Colac started last week and would make the high-risk intersection safer. Completion of the work, which also includes safety barriers, is expected by October.

"We're installing flashing electronic speed signs which are triggered by sensors that detect cars approaching on the side road, temporarily reducing the speed on the highway to 70km/h," Mr Lawrence said.

Mr Greenberger said the alliance welcomed the upgrade at the popular tourism and haulage route, but added the alliance would continue to lobby for a roundabout or turning lanes.

"The speed reduction in conjunction with some engineering solutions would enhance the safety of that intersection," he said.

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