Victorian MPs will have $100,000 at their disposal with allowances set to increase by more than 40 per cent.
The state's 128 MPs will each receive an average $30,000 boost to promote themselves and run their electoral offices.
The allowance hike is expected to cost taxpayers $4 million a year.
Parliamentary allowances cover office expenses, including phone and internet bills, newsletter printing and other communications.
MPs currently receive an allowance of about $70,000, depending on their electorate. This will rise to about $100,000 under the changes, in line with commonwealth trends.
State finance minister Tim Holding said the increase was fair and reasonable and reflected inflation.
He said it was the first time allowances had risen in up to eight years.
"It's important that the parliament provides resources to members of parliament so that they can communicate with their electorates, so that they can communicate with their constituents," Mr Holding said.
"With some of these allowances they haven't been adjusted for anything up to eight years, and that's a long period of time, so we think it's timely now to introduce some measures.
"Those measures will provide additional resources for MPs and we recognise that these are resources that will be enjoyed by MPs from all political parties."
Allowances are calculated according to the number of voters in each electorate.
Every MP will be allocated an additional $1,000 for office running costs at Parliament House. Regional and rural MPs will also receive an extra $2,000 to cover higher telecommunications expenses.
The changes have yet to be introduced to parliament but are believed to have cross-party support.
