The projects are part of an overall plan, Living Bendigo, to put the city's water to better use.

The three projects consist of new water capture and treatment facilities at the Bendigo Airport, the Axedale Golf Club and the new Marist College.

Water Minister Peter Walsh made the announcement at Bendigo Airport on Wednesday morning.

"Living Bendigo will be a locally-led project that will deliver a whole-of-water cycle plan so that the city can make better use of all available water sources, including rainwater, storm water, waste water and ground water," he said.

The Bendigo Airport project consists of a $966,985 water facility, which will be used to flush toilets, clean the runway and irrigate newly landscaped areas.

It has been welcomed by the City of Greater Bendigo, to complement the Bendigo Airport Redevelopment Project.

City of Greater Bendigo Mayor Barry Lyons said the airport would play an important role in Bendigo's economic development.

"The airport is well below the standard of comparable airports," he said. "Our goal is to improve facilities at the airport and construct a 1.6-kilometre runway.

“After the works are undertaken we expect peak storm water flows to be reduced by 89 per cent and the use of potable water at the airport to be reduced by some 49,500 kilolitres annually,” Cr Lyons said.

The Marist College project - which costs about $750,000 - will involve collecting and recycling storm water, treating it, using it to flush toilets and in turn recycling the toilet water; to be used on the school oval.

The Axedale Golf Club scheme will involve a $62,000 trial of a new way of treating recycled water to improve soil quality and water efficiency. 

In addition to funding the three projects, the government has given the Living Bendigo committee a further $1 million to establish more water saving measures.