The Victorian Coalition Government's plan to overhaul the urban water system to make greater use of stormwater, rainwater and recycled water has been boosted in the 2012-13 State Budget.
Water Minister Peter Walsh said an additional $10 million would be invested into Living Victoria.
"The money in today's Budget will establish the Office of Living Victoria (OLV) to reform the urban water sector and improve the way we use water," Mr Walsh said.
"This Budget sets out a clear plan to meet our challenges and position Victoria to take full advantage of current and future opportunities.
"The funding comes in addition to the $50 million set aside in last year's Budget and is a responsible and necessary approach to fund projects which make better use of stormwater, rainwater and recycled water."
Mr Walsh said the OLV would improve water use by ensuring integrated water management is built into greenfield developments during construction.
"We need to make better use of all of our water resources, including rainwater, stormwater and recycled water, to drive change and increase liveability in Melbourne and Victoria's regional cities," Mr Walsh said.
"The OLV will bring together experts from across government who will work to drive the integration of water and urban planning."
The Coalition Government recently unveiled the final report of the Living Victoria Ministerial Advisory Council.
"We support the broad directions the council has taken to improve the use, management and planning of our water resources," Mr Walsh said.
"Establishing the OLV is one of the first major steps in a substantial reform process to overhaul the urban water system.
"Our plan is ambitious and will take time to implement, however we are doing the long-term planning now to avoid the need for costly projects like the desalination plant.
"A key part of this new approach involves changing how alternative water sources – such as rainwater, recycled water and stormwater – are used.
"This will help reduce pressure on our drinking water supplies, improve liveability and reduce the amount of damage to urban streams and waterways," Mr Walsh said.