More than 1500 properties across 2900 square kilometres in the Loddon Shire now have access to the supply which marks the first time in history the region will not have to rely on local rainfall for water access.

The pipeline will supply water to the surrounding communities of Inglewood, Newbridge, St Arnaud and Wedderburn which previously relied on dams and tanks as a source of stock and domestic water.

Water Minister Lisa Neville said the South West Loddon Pipeline project would provide water security to the region for the first time in history.

"The completion of the pipeline is a major milestone," Ms Neville said.

"This project will provide water security for farmers and the agriculture sector - which is good for the well-being of agriculture communities, for jobs and for liveability."

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In 2016, the state government announced it would contribute $40 million towards the $80.6 million project which planned to help communities which had experienced prolonged drought.

The project was also partly funded by Grampians Wimmera Mallee Water, landowners and $20 million from the federal government.

Loddon Shire mayor Gavan Holt, a wool grower and lamb producer at Wedderburn, said the pipeline was a significant milestone for the region.

"It is the most significant economic and social development to occur in the south-west Loddon area since the electricity grid came through 60 years ago," Cr Holt said.

He said the pipeline would provide extensive benefits for agriculture in the region.

"Farmers will no longer have the stress or the worry about carting water for stock," he said.

"It also gives the opportunity for intensive farming, including feedlotting, because the thing you have to have for that is a 100 per cent guarantee for good quality water.

"The quality of life for people living on farms with a reliable water supply will also improve because people can now beautify the environment in which they live; you will see homes with some green about."

The proposed pipeline was the brainchild of a few members of the Wedderburn branch of the Victorian Farmers Federation during the summer of 2015 when dams were dry and farmers were forced to cart water.

The branch approached the Loddon Shire to "run with the project", according to Cr Holt, who met with Ms Neville in February 2015. From there a feasibility study was conducted for the project.

Wedderburn branch of the Victorian Farmers Federation Graham Nesbit, a Merino sheep and crop farmer at Glenalbyn, said the pipeline would provide long-term viability and sustainability for agricultural operations.

"We will be able to concentrate on feeding our stock because carting water is a relentless job but feed will last you a few weeks," Mr Nesbit said.

"In terms of agriculture it means farmers can look at some of the other industries available or look at intensifying their livestock operation which is welcome news for many people."