Melbourne households will face an average $12 a year hike in their water bills when Victoria's desalination plant is turned on for the first time since it was completed in 2012.

The State Government has announced it has placed an order for 50 gigalitres of desalinated water to be delivered next summer.

Melbourne's water storage is now at 63.8 per cent capacity, down from 72.1 per cent at the same time last year.

Water Minister Lisa Neville said the decision was made based on advice from Melbourne water retailers following a "significant decline" in storage levels in the past two years.

"Last year we lost 152 gigalitres of water so this is a really significant decline in our storages so this is a top-up I suppose, a buffer for our storages," she said.

The Government said inflows into the catchment were at 306 gigalitres in 2015, which was worse than average inflows at the height of Victoria's millennium drought, which were 376.

She said the Government had always considered the desalination plant to be an insurance policy for Victoria and Melbourne.

"What we're clear of from advice we've received is that we need to draw on that insurance policy this time.

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"It will see an impact of $12 a year on each household ... but this is about making sure that we can continue to provide certainly to business, continue to grow jobs, and also ensure that our kids can play on sporting ovals that aren't cracked."

She said the $12 would only be applicable while the desalination was being used.

"So if it's only used for a one-year period, it will only have that impact for one year," she said.

"We're hoping that this decision ... provides the buffer we know we need and we're all hoping for [for] everyone in Victoria who is doing it tough in relation to the lack of water and rainfall."

Desal decision politically motivated: Opposition

The decision has been praised by the Victorian Chamber of Commerce.

But Opposition water spokesman Peter Walsh said the switch-on was politically motivated to justify the construction of the plant under the Bracks-Brumby Labor government.

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"Melbourne's water storages are two-thirds full and we're not even on water restrictions, but Daniel Andrews has rushed off and ordered 50 billion litres of expensive desal water," he said in a statement.

"Today Daniel Andrews has shown he doesn't care that he's forcing up water bills and making life harder for Melbourne families."

Permanent water use rules have been in place in Melbourne since December 2012, replacing staged restrictions in the city.

Regionally, four towns in south Gippsland - Korumburra, Poowong, Fish Creek and Loch, are on stage one or two water restrictions.

Target 155 water-saving campaign re-activated

The Government will also reactivate the Target 155 campaign, encouraging households to limit their water use to 155 litres a day and also look at options to reverse the North-South Pipeline.

"A target about promoting conservation amongst Melburnians, we know that Melburnians have really changed their behaviour in terms of water use, but we want to continue to encourage people to see water as very, very precious," Ms Neville said.

She said Victorian households use an average 161 litres of water a day.