The Abbott Government has relinquished all of its $10 million in funding towards the LLENs in the 2014/15 budget, leaving just $2.3 million of State contribution.

Mr Dixon said that while the funding cuts will force the education organisation to change the way it operates, the Victorian Government is working towards ensuring its programs can continue.

"In fact I actually met with the LLENs association in anticipation of the likelihood of that cut and started to talk about how we might assist with transitioning," he said.

"It is really important we don't lose the goodwill, expertise and the networks that have been built up by the LLENs over a number of years.

"This is a blow from the Federal Government to LLENs and we are working with them on how we can transition and hopefully within the next couple of months we will be able to make some announcements about how we can support LLENs in that transition."

Mr Dixon said the State Government was not in a position to make up the Federal Government's cuts, which was called upon by Shadow Minister for Higher Education Steve Herbert during a visit to the Central Grampians LLEN earlier this month.

He said the Napthine Government's contribution would remain the same as in the previous financial year, while it has also recommitted ongoing funding of about $5 million a year to workplace learning coordinators.

Workplace learning coordinators are available in each LLEN area to facilitate workplace-based learning experiences for students.

"The fact that the community is so concerned about the future of LLEN in the Ararat area means that organisation is valued," Mr Dixon said.

"That is a testament of the hard work and the success of that LLEN over a number of years. The local community quite rightly don't want to let go of it because they see the value in it and I certainly respect that.

"It is important that we have a structure, but LLENs next year will be different and into the future will be different to what they have been in the past - that's a reality and we want to make the most of this change."

The Central Grampians LLEN has been in operation for more than 10 years and offers a variety of programs to youth across the Ararat and Stawell communities.

CGLLEN executive officer James Skene has expressed his concern about the local business' ability to survive in the near future due to the latest cuts.

Ararat Rural City mayor Paul Hooper, who was on the initial board which helped establish LLENs, said the organisation's aim originally was to engage with youth in the community who were at a disadvantage, but has since gone on to develop a number of 'fantastic' programs that have benefited a range of people from different socioeconomic backgrounds.

He said the CGLLEN has a place in the Ararat community.

"I think so, particularly that engagement they have with our youth, it is vital and important," Cr Hooper said.

"I'd be disappointed on behalf of the kids (if the LLENs were forced to shut due to a lack of funding)."