New lookouts will be built at the Twelve Apostles and the Loch Ard blowhole on Victoria's Shipwreck Coast, under a multi-million-dollar plan to boost tourism along one of the world's most spectacular coastlines.

The Andrews Government will spend $9.8 million on the first stage of a $174-million master plan for the region, along a 28-kilometre stretch from Princetown to the Bay of Islands, in the state's south-west.

The Shipwreck Coast attracts 2.6 million visitors a year but the average tourist stays less than 40 minutes and spends just 18 cents.

The investment is aimed at bridging the widening gap between tourists' expectations and their experience along the most picturesque part of the Great Ocean Road.

The lookouts will be built at the Twelve Apostles and Loch Ard Gorge blowhole, where the viewing platform was closed to the public in 2010 because of coastal erosion, and a pedestrian bridge over Campbell's Creek in Port Campbell.

Telecommunications and WiFi will also be improved, and a Twelve Apostles mobile phone app is likely to be developed.

Environment Minister Lily D'Ambrosio said the investment would bring extra tourist dollars and jobs to the region, boosting the economy by $12 million a year.

"The Shipwreck Coast is an international tourist destination and this investment will help strengthen the local economy through sustainable tourism," she said.

Ms D'Ambrosio said Great Ocean Road townships devastated by last year's Christmas Day bushfire would also benefit from the improvements.

An illustration of the proposed suspended beam at the blowhole on Victoria's Shipwreck Coast. ( Supplied: McGregor Coxall )

Report points to demand for extra hotel beds

The Shipwreck Coast's limestone cliffs and rock formations are the country's third most visited attraction behind the Sydney Opera House and the Great Barrier Reef.

The master plan was published last year, detailing 58 projects over the next 20 years that could result in a 38 per cent increase in the number of visitors to the region.

Despite expected growth in short-stay trips to the Twelve Apostles and nearby coastal features, the report warns official forecasts for the coast and the wider region show a drop in visitor numbers of around 1 per cent a year.

The report also highlights demand for more high-quality accommodation, with an estimated 328 extra rooms in resorts, hotels, motels and backpacker hostels needed around Shipwreck Coast parks, and an additional 1,774 rooms at the western end of the Great Ocean Road.

Twelve Apostles Tourism and Business Association president David Pope said the Shipwreck Coast's sub-standard infrastructure and tired timber boardwalks did not reflect its world-class views.

But he said the changes would encourage people to explore more.

"It's really about getting out of the car and feeling the wind on your face and having a good look around and trying to picture what it was really like back in the day when ships were caressing the coast," he said.

The Shipwreck Coast plan is yet to attract any federal funding or private sector investment.