Plans for an Australian-first offshore wind farm off Victoria's south-east coast, which could provide almost a fifth of the state's energy, have won cautious government support.

Key points: Wind farm could provide 18 per cent of Victoria's energy and power 1.2 million homes

Wind farm could provide 18 per cent of Victoria's energy and power 1.2 million homes Project still needs government approval

Project still needs government approval Federal, state ministers have given early support

Offshore Energy has been working with the Federal Government on a feasibility study for the 250-turbine proposal, and will present details of the plan to a Victorian Government-led energy roundtable in Churchill today.

The wind farm — which would be built 10–25 kilometres offshore in waters near Port Albert — would spread over 570 square kilometres in Commonwealth waters, and could provide 18 per cent of the state's energy.

The wind farm would be built between 10 and 25 kilometres off the Gippsland coast. ( Supplied )

Offshore Energy's managing director Andy Evans said the $8 billion project could reduce carbon emissions by about 10.5 million tonnes per year.

"The benefits of offshore wind, particularly off the coast of Gippsland, is it's a much more consistent and constant wind resource," he said.

"You don't have as many of the restrictions as you would have with other land-based wind resources."

Mr Evans said the wind farm would connect to the existing network and could supply power to 1.2 million homes.

He said the feasibility testing phase would take three years.

"Offshore wind projects have been developing rapidly, particularly in Europe, but also in the northern hemisphere," Mr Evans said.

"There are a number of offshore developers and certainly large infrastructure investors, particularly here and overseas, that are progressing these projects."

Hope for thousands of jobs

Preliminary planning and environmental studies show the plant could generate direct about 12,000 direct and indirect jobs, in a region that has been plagued by job losses since the Hazelwood power station shutdown.

Federal Infrastructure and Transport Minister Darren Chester, who is the MP for Gippsland, has given early support, pending an environmental study.

"We have great natural resources in Gippsland — wind off the coast, coal timber. If there are ways to capture that and turn into energy that powers manufacturing sector, I am all for that," he said.

"But it's important the proponents work with the local community."

Victoria's Energy Minister Lily D'Ambrosio said the company would first need to get the go-ahead from the Federal Government, before seeking Victorian planning and environmental approvals.

"This is a massive project. It's an exciting project, it is unprecedented and one that our Government supports and we'll continue to work alongside Offshore Energy to work through all of the planning requirements," she said.

"We will work together with the Commonwealth to ensure that all of the necessary approvals are dealt with so in the end Offshore Energy can go ahead."

The company said it had not discussed federal funding options.

Cautious optimism from green, development groups

Richard Elkington from Regional Development Victoria warned the feasibility study was expensive and could lead to disappointment.

"It's a good idea for all sorts of reasons – it's not coal," he told ABC Gippsland.

"We shouldn't be carried away with the job numbers though. We've been hearing about potential coal projects for the last 20 years.

"It's always just around the corner and it holds out the prospect of hundreds or thousands of jobs and we've got a great future in the Latrobe Valley, but none of those projects have been realised."

Commercial and recreational fishing is vital to Port Albert's economy. ( ABC Gippsland: Jenni Henderson )

Port Albert cafe owner Michael Hobson raised concerns about the environmental and economic impact on the coastal town, which has a population of about 250, and is a base for fishing fleets and boating.

Mr Hobson said the proposal was close to globally recognised wetlands, and could affect local wildlife.

"It's internationally significant in regards to the birdlife and migratory birdlife that travel out of the area," Mr Hobson said.

"We're looking at excluding our commercial fishing operators and our recreational fishers, which is a significant part of our local economy.

"So of course, that comes with its own issues as well."

Mark Wakeham from Environment Victoria said the offshore windfarm could be a huge opportunity, but there would be risks to manage.

"On balance, we're pretty excited about the potential for this project although we'll be looking very closely at the environmental impacts of it," he said.