Half of the money will be spent on water rebates for irrigators.

Other initiatives include $15 million for subsidies on municipal rates and charges, and investment in rural infrastructure projects, employment programs and mental health services.

Premier John Brumby said cabinet had today decided to bring the package forward, given the urgent need for assistance from farmers battling record drought.

“Our government is taking action to stand by farmers, giving them the support they need to make it through this terrible drought, and to plan for the future,” Mr Brumby said.

“Today’s package takes action to provide immediate drought relief to farmers, their families, and the communities in which they live and delivers on this government’s commitment to ensure Victorian farmers can remain sustainable through the drought and position for the future.”