After years of announcements and promises, Avalon Airport, near Geelong, is finally set to become an international airport as Air Asia announces regular services to Kuala Lumpur, with flights expected to start by the end of the year.

The project will see up to 220,000 passengers pass through the airport every year, opening up Geelong and the Great Ocean Road to more international visitors.

A new terminal will be constructed which will be capable of exporting 14 tonnes of fresh Victorian produce every day.

The Victorian Government has invested $1.5 million in infrastructure works at the airport to ensure Jetstar will continue to operate from the airport, a second, curfew-free airport for the state.

More than 200 jobs will be created at the airport, giving retrenched auto workers new career opportunities, Victorian Employment Minister Ben Carroll said.

"You'll see in construction, 33 jobs, but above and beyond that, most importantly, there are going to be 200 jobs ongoing," he said.

"They're going to be former workers who worked at Toyota, the Ford factory and the Holden factory [who will] get a chance here at Avalon."

Foreign Affairs Minister Julie Bishop said the move enhanced Australia's connections with south-east Asia.

"This is about bringing people to Victoria, an opportunity for more business travel. But also it's providing people with choice, with options," she said.

"It's about more options and the more we can connect with Asia and south-east Asia, which will be the biggest middle-class population in the world, the better it is for economic development and jobs here in Australia."

Flight plan a 'turning point'

Local Liberal MP Sarah Henderson said it was a game changer for the region to have an international terminal opening up the area to the world.

"We have great aspirations for an Avalon railway station, a rail link straight to the door. So there are very, very big plans for this region," she said.

In 2014, plans were announced for a rail link by the then-Liberal government, but no timeline was given and the plan ultimately went nowhere.

"We need the rail link but that's natural," said Lindsay Fox, the boss of Linfox, which owns Avalon Airport.

"That was promised by the previous government but they might [now] react."

Tony Fernandes, the CEO of Air Asia, said the company had gone from having two planes to 230 planes and would carry 89 million people this year.

"I firmly believe this is a turning point in our great dream of making Australian and south-east Asia and Asia much much closer," he said.

Mr Carroll also said the announcement was a victory over Sydney.

"As a proud Victorian it would be remiss if I didn't mention that the commencement of the international flights from Avalon means Melbourne beats Sydney in that important race to have a second international airport," he said.

The deal will be a game changer for the Geelong area, Sarah Henderson said. ( ABC News: James Oaten )

Previous attempts to attract international flights failed

There have been repeated pushes to establish Avalon as a second international airport for Victoria but none have come to fruition.

In 2014, the airport struck a deal with the HNA Group, which runs Hainan Airlines, to operate flights between Avalon and China.

The year before, Australia and the Philippines signed a memorandum of understanding to allow Australian and Philippine carriers to operate services between Avalon and the Philippines.

In 2012, the Federal Government approved changes to Avalon's lease agreement, allowing it to build an international terminal.

In 2015, the Victorian Government announced a $12 million deal to keep local carrier Jetstar operating domestic services out of Avalon.

The airline recently announced plans to scrap its service between Avalon and Hobart, citing low demand.