PUBLIC transport fares will increase 2.4 per cent from New Year's Day.

A two-hour zone one Myki money fare will increase from $3.50 to $3.58.

But travellers will lose 59 minutes of travel from a two-hour pass as the Government cuts the time limit from two hours 59 minutes to exactly two hours after a passenger touches on public transport.

A two-hour zone one and two Myki money pass will increase from $5.92 to $6.06.

Passengers with Myki passes will see a seven day full fare zone one and two pass rise from $59.20 to $60.60.

Weekend travellers will see the biggest increase with the weekend and public holiday cap jumping from $3.50 to $6 per day.

Public transport minister Terry Mulder said the fee rise was in line with the Consumer Price Index (CPI) and the Government continued to subsidise about 70 per cent of the cost of the system.

"For seniors, children and concession card holders, this value for money is even greater," Mr Mulder said.

Public transport users can expect bigger fee increases in future years though after the Government announced fees would rise by CPI plus an extra 2.5 per cent, from 2015.

Using the current CPI as an example fees could rise by 4.9 per cent in 2015.

The increases were revealed in the state government's mid-year budget update, released this afternoon.

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