Dumping the East West Link contract will cost Victoria almost $100 million more than first thought, with Treasurer Tim Pallas conceding a complex deal to guard against financial risks linked to the thwarted project must now be paid out.

The Victorian Auditor General had previously estimated the Andrews government's explosive decision to scrap the road project would cost the state about $1.16 billion.

Traffic congestion on Alexander parade - Victorians will shell out $100 million more in compensation for the scrapped East West Link. Credit:Justin McManus

The December 2015 estimate included a $218 million liability for an intricate financial arrangement between the Treasury Corporation of Victoria and the Department of Treasury designed to protect the state against interest rate risks associated with a massive $3 billion loan facility linked to the project.

At the time, Mr Pallas said he hoped the $218 million guarantee - known as an interest rate swap - could be used in the future as a financial facility for another big project, such as the $10.9 billion Metro Rail tunnel.