CAR registration stickers will be scrapped in a move estimated to save Victorian taxpayers almost $20 million a year.

Premier Denis Napthine and Roads Minister Terry Mulder today said the change will be introduced for cars and light vehicles from January 1 next year.

Industry groups, who have argued the stickers are outdated and lobbied for them to be scrapped, welcomed the decision as did the Opposition.

Now rego stickers are gone, what should we ditch next? Tell us what you think is outdated by commenting below

Dr Napthine said "pesky" registration labels would be a thing of the past and the move was an important red tape reduction.

He said the reform brought Victoria into line with most other states, which have either abolished registration labels or plan to.

"We've all had trouble in the past trying to remove those pesky stickers with razor blades and as a veterinarian, with scalpels, and all sorts of other devices to get rid of the stickers, then get rid of the underlying glue and put in place the new stickers,'' Dr Napthine said.

"When you operate a business with dozens or even hundreds of vehicles there is a significant cost involved in time and effort to change over registration labels ever year.''

VicRoads issued about 5.4 million registration labels in 2011-12, which cost about $600,000 to print.

Millions of dollars are also spent in administration costs and labour.

Mr Mulder said: "There is no need for anyone to fear that they will be caught driving an unregistered vehicle because the same reminders will be sent to them.

"They just won't need to stick a label on their windscreen."

Tourism and Transport Forum deputy CEO Trent Zimmerman said the decision was good news for motorists and the rental car industry, which has about 140,000 vehicles nationally.

"Victoria is the second last state still using rego stickers and while it is of some annoyance for your average motorist, for rental car companies owning tens of thousands of vehicles it actually becomes a major piece of red tape,'' Mr Zimmerman said.

"This measure will save rental car companies tens of thousands of dollars because it means that each year they won't have to be scrapping off and putting on stickers on their large car fleets.''

Western Australia and South Australia were the first states to axe car registration stickers followed by Tasmania and NSW. Queensland is still investigating the issue.

RACV general manager of public policy Brian Negus urged the State Government to reinvest the money saved into improving transport.

``With today's technology, including number plate recognition, which the police have, and certainly computer chips in all new cars coming on to the market, this really makes rego labels completely out dated and removes the need for them to be issued,'' Mr Negus said.

Opposition Leader Daniel Andrews supported the change but called for the savings to be passed on to drivers through reduced registration costs.

"If technology has moved forward and it's possible to do away with motor car registration stickers then that's a good thing, I can understand that and I'm sure most Victorians will,'' Mr Andrews said.

"What I can't quite understand though is if there's going to be savings to Government why are motor registration fees going up, why is it costing now more than $700 to register a car.''

The Herald Sun revealed last year the TTF and RACV were urging the State Government to scrap the stickers.

The Government said at the time it had no plans to axe the labels.

Registration costs will not change.

amelia.harris@news.com.au