Deputy Premier Michael McCormack and local government minister Mark Coulton today announced a new $500 million Local Road and Community Infrastructure program.

The federal government also brought forward $1.3 billion of the 2020/21 Financial Assistance Grant payment.

Funding will flow to local governments, with more than $2.24 million allocated to the City of Greater Bendigo.

Macedon Ranges and Mount Alexander shires were each set to receive more than $1m.

Bendigo city chief executive Craig Niemann welcomed the funding, which he was eager to learn more about.

He said the federal government had asked the city to submit a list of local road projects, which he believed might be aligned with the announcement.

The Roads to Recovery program was today cited as one of the new $500m fund's influences.

Mr Niemann said Financial Assistant Grants were an annual source of federal funding for local governments. He said bringing some of that support forward would help councils manage COVID-19 cash flow impact.

In her capacity as chair of Regional Cities Victoria, Bendigo mayor Margaret O'Rourke said the funding would help regional Victoria to respond to and recover from the COVID-19 crisis.

Announcing the $1.8b 'boost', Mr McCormack said supporting councils to improve roads and community infrastructure would have lasting economic and social benefits, especially in the regions.

Federal opposition leader Anthony Albanese welcomed the new $500m fund, which he said Labor had called for "for a long period of time".

"Local government is in a position to roll out projects efficiently, and they have many shovel-ready projects," Mr Albanese said.

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