The decision represents the latest salvo in an increasingly heated debate with the Commonwealth over infrastructure, with Victoria complaining bitterly it is getting just 9 per cent of the federal major projects carve-up. An artist's impression of the Western Distributor tollway as it crosses the Maribyrnong River. Labor announced last year that it was planning to build the toll road - which is likely to include a 1.5 km, six-lane tunnel and a bridge over the Maribyrnong River - in a controversial partnership with tolling behemoth Transurban. Under the original funding proposal, Transurban would have paid about two-thirds of the construction costs. In return, it will collect the tolls, expected to be $3 for cars and $13 for trucks.

It will reap billions of dollars of extra revenue from a likely 10-year extension to the existing CityLink tolling period. The Western Distributor, as seen in this artist's impression, will include a 1.5 km, six-lane tunnel. Mr Andrews had initially demanded the Commonwealth contribute the balance of the cost, but on Thursday he conceded it wasn't going to happen, with Victoria now set to chip in the remaining cash. "There was some prospect the federal government would be a partner in this project, last Friday ... Malcolm Turnbull made it very clear that he is not interested being a partner in this project," Mr Andrews said. The interchange for the Western Distributor that will slice through the Hyde Street Reserve.

"This project simply cannot wait." Federal Major Projects Minister Paul Fletcher said Victoria's decision to fund the road itself confirmed the position taken by the Turnbull government - that no funding from the Commonwealth is required because the project is paid for with tolls. "Because its economics are underpinned by tolls, both on the new components and through an extension of the CityLink toll concession, it is not a project which requires grant funding from the Commonwealth," Mr Fletcher said. Victoria has already accelerated efforts to finalise the design, with Transurban releasing two options for connecting the West Gate Freeway to the Western Distributor Tunnel, one directly within the road reserve, the other via ramps to a portal in nearby parkland. The extensive consultation drive is designed to avoid a sky-rail style public relations disaster, with some Yarraville locals worried about a loss of urban amenity.

As part of the project, the Andrews government has also locked in plans to spend $400 million to upgrade the badly congested Monash Freeway with extra lanes and traffic management technology. But in a press conference attended by 14 Liberal MPs and candidates, Mr Turnbull last week demanded Labor's Monash upgrade be separated from its Western Distributor proposal and dramatically expanded, with $500 million of Commonwealth funding matched by Victoria. Mr Turnbull suggested the best the Commonwealth could offer for the Western Distributor project was a concessional loan to the state - an idea which was quickly rejected as unnecessary because state borrowing costs are at similar lows to Commonwealth borrowing costs. The Commonwealth has also so far committed just $10 million for planning work on Victoria's $10.9 billion metro rail project.

Roads Minister Luke Donnellan on Wednesday slammed the Commonwealth's $1 billion proposal as "bird brained", "amorphous" and "weird", suggesting discussions between the two tiers of government have already run into trouble. Mr Andrews confirmed Victoria would not be separating its Monash upgrade from the Western Distributor project, meaning a key part of Mr Turnbull's $1.5 billion funding deal has already been rejected by Victoria. "This project cannot wait in every respect," Mr Andrews said. "The Western Distributor will slash travel times from Geelong and the west, create 5600 jobs, give us a genuine second river crossing, and we are providing every dollar required." Opposition Leader Matthew Guy said the proposal would be at capacity barely 10 years after being built with Melbourne already bulging at the seams.

"We can't keep going on with Band Aid solutions ... when the state has no clear population policy," Mr Guy said. "We are going to need to build project after project after project like this simply to keep up with population growth if the state does not have a clear objective about decentralising our population and having a clear population plan for Victoria."