A Morwell precinct expected to attract significant industrial investment will have basic infrastructure installed and will be connected to the Port of Melbourne by rail.
On Thursday, State Regional Development Minister Jaala Pulford was in Morwell to announce the infrastructure installation for the Gippsland Logistics Precinct and the completion of upgrades to Australian Paper's Maryvale mill spur line.
The $5.3 million funding for the precinct infrastructure will come out of a $10 million state government fund, announced as an election promise in 2014.
Ms Pulford said all the important utilities needed for businesses to set themselves up in the precinct would be provided.
"We are also, just quietly behind the scenes but very busily, working away at discussions with a number of organisations that might be the future tenants here," she said.
"We are feeling very positive about demand for this precinct."
Ms Pulford said the discussions with Australian Paper were underway to open the line up for use by other industries or companies.
"Everything we can move by freight means we're not having to move it on the road, which means the whole community benefits from that," she said.
Latrobe City councillor Graeme Middlemiss said the rail connection to the Port of Melbourne and the Logistics Precinct would attract industries that want to use rail for export.
"Ultimately, if you look at exports in Victoria, the road network in the city is starting to clog up and we are finding that people who are exporting, particularly, are having trouble getting to the wharf on time to unload their container and rail is one of the solutions to that problem," he said.
"So if a company is looking to set up in the country and wants direct access to the ports, this is the ideal site for them.
"This is an advantage, and certainly we need jobs at the moment, as everyone is aware of the downturns in the power industry."
Australian Paper national manager of sustainability and communications Craig Dunn said the spur line upgrade was important to ensure logistics efficiency.
"We export our paper to more than 75 countries around the world and it gives us more efficient access to our domestic markets," Mr Dunn said.
"It is vital we have efficient transport infrastructure here in the Latrobe Valley."