It follows the federal Department of Infrastructure saying this week that work on a first phase of "priority projects" on the state-delivered project was due to commence in early 2021.

But Victoria's Transport Department would not confirm what those initial projects were.

Instead, a spokeswoman said the department had consulted closely with the federal government on a Princes Highway Corridor Strategy, but was "awaiting the release of funds to commence detailed planning for these works".

It's understood the project is with the federal government for sign off.

A federal Department of Infrastructure spokesman said the two governments were working "closely to finalise funding arrangements".

Federal Wannon MP Dan Tehan announced the $60 million before the 2019 federal election and has since pressured the Victorian government to make a 20 per cent contribution and fast-track the work.

He has offered the federal money "upfront" with the state contribution not required until the project's end.

"They are not sitting waiting, they could be getting going right now," Mr Tehan said.

He said he was disappointed further money for the highway wasn't announced in this week's state budget, adding that the federal government would now look at alternatives for the project to commence.

"The way that all of this is normally allocated requires a commitment from state and territory governments otherwise separate authority needs to be given," Mr Tehan said.

"Given this is now a unique circumstance - and this is highly unusual, usually state and territory governments give and there's a partnership - we have to see if there's a way around it.

"That's what I am talking to the Deputy Prime Minster about to see if there is a way through. Given there was zero dollars in the state budget for the Princes Highway West."

Princes Highway West Action Alliance lobbyist Stephen Lucas expressed frustration over waiting for the two governments to strike an agreement.

"It appears none of the projects have agreement at both state and federal level, which is very hard to understand," Mr Lucas said.

The spokeswoman for Victoria's Transport Department pointed out safety improvements between Warrnambool and Panmure and two new overtaking lanes near Weerite were currently under way.

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