"This is great news for people living in Ararat and Beaufort, as well as the thousands of cars and trucks that travel on the Western Highway every day," Ms Staley said.

The funding will be jointly provided by the Federal and State Coalition Governments, and will provide for detailed planning of both of these important bypass projects.

"The Western Highway is vital to communities in Victoria's west and these key bypasses will keep large freight vehicles off local roads and reduce travel times for through traffic," Ms Staley said.

The announcement follows the Napthine Government's announcement last month that a contract for more than $95 million has been awarded to Lend Lease to upgrade the Western Highway between Beaufort and Buangor.

This stage of the Western Highway upgrade will deliver 15 kilometres of road duplication for the Western Highway between Beaufort and Buangor. The Napthine Government has also called for Expressions of Interest (EOI) for the construction of the Buangor Bypass.

"It's a fact of life in rural and regional communities that many of us travel long distances to work, do business or visit friends and family. We need safe, modern road networks and I'm proud of the investments the Napthine Government is making in our roads here in Ripon."

Ararat Rural City Mayor Cr Paul Hooper said the announcement was good for the town for a number of reasons.

"It is really important because it creates certainty for residents living in the affected area and it enables us to get on with future planning," he said.

"The third point is the amenity is critical. At the moment we have in the order of 6000 vehicles a day going through Ararat, of which about 2000 are heavy vehicles - that number is going to more than double in the next 20 years.

"In Ararat we are split over a couple of streets, but in Beaufort they are coming through one, so it is not necessarily about the traffic flow today, it is what it is going to be in the future."

Cr Hooper said there were some nerves among residents about how a detour will change the economic outlook of Ararat, but he said examples of bypasses in other areas have shown it to be a positive move.

"Everywhere that bypasses have occurred up the Hume Highway the towns have actually flourished," he said.

"Everywhere that has similar distances between a major regional centre and Melbourne have had really positive impacts on their town and we are confident that will be the case here.

"Again, we need to have certainty or we can't do any proper planning or studies of what Barkly Street and High Street are going to look like...but I think this is going to be a really good thing for Ararat."