The federal government has agreed to buy Victoria's and NSW's respective $2.077 billion and $4.154 billion stakes in the Snowy Hydro, in order to proceed with an expansion to benefit the east coast electricity grid.
In return, the states will have to spend the money on "productive infrastructure".
"Victorians will do exceptionally well out of this," the state's Treasurer Tim Pallas told ABC radio on Friday.
"They will get more power. It will sit consistently with the state's objectives to increase renewable energy and, importantly, this will free up over $2 billion for further investment in productivity-enhancing infrastructure."
Victoria's parliament will have to agree to the sale but Mr Pallas says he can't see any downside, with the project to ensure 2000 megawatts in extra power for both states.
Federal Energy Minister Josh Frydenberg said the deal also meant the Snowy Hydro stayed in public hands.
"Nobody can bind future governments but I don't think it's in the interests of any future governments, whatever their political persuasion, to do anything but keep this in public hands," the energy minister told the ABC.
