The Federal Government has put more money into a program to support living organ donors in a bid to halt a dramatic drop in the rates of donation in the past eight years.

Federal Health Minister Greg Hunt said $4.1 million would be provided in Tuesday's budget to extend the program for another four years.

The program began in 2013 because of the declining living donor rates.

Donors will receive nine weeks of paid leave, and, for the first time, out-of-pocket expenses will be covered.

Mr Hunt said the rates of living organ donation, such as the donation of a kidney or part of the liver, had fallen by 19 per cent since 2009.

"This is about providing support to organ donors who are making a contribution for a part of their kidney to a friend or a family member," he said.

"It's the most generous and humane gift that one person can bequeath to another.

"It's supporting deep generosity, it's supporting the health system and it's helping to save lives."

Mr Hunt said the program would run for at least another four years, and may later become permanent, in order to get more donors to come forward.

"It's being extended because it helps keep the organ donation rate up. It means we can find compatible donors and it supports the very people who are making an enormous sacrifice for other people," he said.

"So this is simply what a government should be doing as part of the budget."

Mr Hunt said a number of groups had been consulted about the extension of the program.

"We've been speaking with Kidney Australia, we've been working with organ groups, organ donation groups and it's an outcome that has been sought by people across the board," he said.

Living donor recipients have much better survival rate

Kidney Health Australia applauded the announcement and the extension of the program to cover out-of-pocket expenses.

The organisation's CEO, Mikaela Stafrace, said it was a welcome relief for more than 1,000 chronic kidney disease patients currently on the transplant waiting list, and their families.

"Chronic kidney disease patients on the list are waiting up to seven years for a donor kidney. They have to undergo dialysis, five hours a day, three times a week in order to stay alive and the toll on their lives is enormous," she said.

"We know deceased organ donations will never be able to keep up with demand for kidney transplants, which is why we need to support living donors.

"Last year, 102 Australians accessed the program and became living donors, which helped to achieve 267 living kidney donations in total, which is 26 more people than in 2015."

She said kidney transplants from living donors were associated with a 27 per cent better survival rate for recipients over 20 years.