Member for Wannon Dan Tehan announced an additional $9.4 million for the highway in the federal budget on Tuesday night.

He said the federal government had committed the extra funds and it would be up to the state government to decide how the money was spent on the stretch of road.

"The federal government provides the money and it's up to the state government to identify a project worth that amount," Mr Tehan said.

He said he hoped the state government would finalise that process during the winter months to allow for work to begin this year.

The funding is in addition to the $60 million the federal government has already committed to upgrades between Warrnambool and Port Fairy.

"My hope is that it would happen sooner rather than later," Mr Tehan said.

He announced $46.9 million for Wannon roads, with $17.5 million for dairy supply chain upgrades and an extra $20 million for Green Triangle future priorities.

Mr Tehan said the projects would create hundreds of extra jobs.

He said the projects would make local roads safer, reduce travel times and support thousands of jobs across the state.

"The federal government's record funding commitment is creating local jobs and boosting business investment, while securing COVID recovery for Wannon," he said. "The federal budget continues the government's agenda to improve high-priority roads, essential to the movement of people and freight to support our region's economic development."

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