The state government has committed to extending the Mode Shift Incentive Scheme (MSIS) for another year.
Ports and Freight Minister Melissa Horne said the government would provide a further $4 million boost to the scheme, extending it until June 30 2021.
She said it built on the more than $20 million investment in the scheme over the past five years, which the government claims removed the equivalent of 28,000 truck trips off Victorian roads each year.
Ms Horne said with Victorian freight volumes set to nearly triple by 2051, it was vital rail took up a greater share of the growing freight movement across the state.
"We're moving more freight more efficiently and keeping our state connected by reducing rail costs and making it easier to get Victorian products to our ports," Ms Horne said.
"This scheme benefits the community by getting trucks off roads which locals use every day and supporting industry through cost-effective movement of freight."
The scheme provides support to rail freight companies to make rail transport costs competitive with road freight and allows exporters to get their goods to port sooner.
The MSIS is one of a number of government projects to get more freight onto rail, including the Port Rail Shuttle and new intermodal terminals planned at Truganina and Beveridge.
The Government has also approved the Port of Melbourne's $125 million investment in building new on-dock rail at Swanson Dock East, which will reduce costs for exporters and get Victorian products to port sooner.
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