Private companies blocking inner-city arterial roads for construction works will be charged up to $250 per day as the government seeks to crack down on traffic congestion.

The new Road Occupation Charge will apply to 121 suburbs, across 11 inner-Melbourne council areas, from April 1.

Private companies blocking inner-city arterial roads for construction works will be charged up to $250 per day. Credit:Louie Douvis

Roads Minister Jaala Pulford said the new levy would rake in about $1 million annually and "motivate" businesses to minimise disruption on busy main roads.

Businesses will need to pay between $173 and $252 per lane per day. The fee has been set by the Valuer-General.