Victoria will pour nearly $500 million into its AFL grounds, with almost half the cash going to a makeover of Etihad Stadium and millions for women's football.
In a $225 million deal with the AFL, the grand final will stay at the MCG until at least 2057, while Etihad Stadium and its surrounding precinct will be upgraded.
"This is for the fans - giving them the best venues, better access to the sports they love, and keeping the Grand Final where it belongs - at the MCG - for the next 40 years," Premier Daniel Andrews said in a statement.
"This landmark deal will bring more footy to the regions, boost AFLW facilities and make sure Victoria stays the sporting capital of Australia."
Etihad will be redeveloped for rectangular sports like soccer and rugby, its women's change facilities will be improved and there will be guaranteed access for other codes and major events.
The deal also means the Melbourne Cricket Club Trust has the security to undertake a major redevelopment of the MCG.
Premier Daniel Andrews said the investment of taxpayer dollars was necessary for Melbourne to remain the sport and major events capital and create jobs.
"If you don't invest in those things, then others pass you by," Mr Andrews told ABC radio on Friday.
"NSW are doing this, obviously Queensland will have a whole lot of legacy stadiums and other benefits coming out of the Commonwealth games, Adelaide Oval's being completely rebuilt and Perth's got a stadium they've spent one and a half billion dollars on.
"We've got much more than they have for much less out of this deal. This is really a very good outcome."
Collingwood president Eddie McGuire unveiled details of the precinct redevelopment on the AFL Footy Show on Thursday night.
"A concourse will be built and a redevelopment of Richmond station ... so that you'll never have to put your foot on the road again at Brunton Avenue or Punt Road," he said.
"For the Victorian clubs, who have been copping it in the neck with inferior stadium deals for so long now, there's going to be probably a couple of million dollars extra in the pocket for each of the Victorian clubs to be able to survive and prosper going forward."
The money will come out of the 2018-19 state budget, alongside $241.6 million for suburban and regional grounds.
Of that, women's football will get a stack of cash, including $20 million to redevelop Ikon Park into the home of AFLW.
The budget also provides $60 million for community sporting grants and $5 million for Community Sports Infrastructure Loans.
