Victorian political donations will be capped at $4,000 over four years and will be disclosed immediately online in Victoria under sweeping reforms outlined by Premier Daniel Andrews.

If the changes are introduced: No more than $4,000 can be donated over a four-year parliamentary term

No more than $4,000 can be donated over a four-year parliamentary term Donations over $1,000 will need to be disclosed, compared to $13,200 now

Donations over $1,000 will need to be disclosed, compared to $13,200 now Tickets to fundraising events will be considered part of the capped amount

Foreign donations are also being banned under the Labor Government's reforms, with only Australian citizens allowed to make contributions.

Fines of up to $44,000, and two years' prison will be established for breaches of the tough new election rules.

The Government is also targeting other bodies and organisations who raise cash for political parties, such as Labor-aligned Progressive Business and the Liberal Party-linked Cormack Foundation.

The changes will be a burden on the Electoral Commission, the Government said, and more funding will be allocated.

Public funding for election campaigns will have to be increased, but Special Minister of State Gavin Jennings would not say by how much.

The changes will need to pass through Parliament.

"These will be the strictest donations in the country, because Victorians deserve to know who donates, how much, and when," Mr Andrews said.

No more than $4,000 can be donated over a four-year parliamentary term, and all donations over $1,000 will need to be disclosed — political parties currently do not need to reveal donations under $13,200.

Unions and corporations will also be restricted in donations to political parties of $4,000 over four years.

Tickets to fundraising events held by associated entities will be considered part of the $4,000 limit, with cost of the event deducted from calculations.

"We'll give Victorians confidence that governments are making decisions on their merits, not repaying favours to political donors," Mr Andrews said.

He said the changes would make Victoria's political donation laws the toughest in the country.

"Real-time disclosure and the much lower disclosure threshold, that's the key to transparency and Victorians knowing who's donating, how much and when," he said.

There has been a campaign to reform the state's donations laws for some time.

In 2015 the state's ombudsman said laws needed to be tougher to eliminate the perception that politicians could be bought.

The Greens have proposed banning all corporate and unions donations, limiting donations to $1,000 and mandating real-time disclosure.

Revelations, uncovered by an ABC-Fairfax investigation, that Opposition Leader Matthew Guy dined with an alleged crime figure at a lobster restaurant earlier this year prompted renewed calls for donation reforms.

It is understood the donation changes were to be announced earlier but the lobster scandal delayed the reforms.

Greens yet to be convinced

Greens MP Greg Barber said the Government had developed the reforms without consulting other members of Parliament.

He said although the changes appeared similar to what the Greens had been pushing for, they would need to see the legislation before deciding whether to support it.

"Dodgy deals are in Dan Andrews' DNA," Mr Barber said.

"We've learnt that over the last three years and I'll guarantee you he's left himself a loophole so that he can benefit from this measure.

"On the surface of it, it looks a lot like what we've been promoting ever since we first walked up the steps of Parliament, but it depends very much on the detail of how it's implemented and we'll be scrutinising that legislation very closely."

Mr Barber rejected Mr Andrews' claim the changes would give Victoria the toughest donation laws in the country.

He said New South Wales would still have a tougher system, despite having a higher cap.