A $40 million Victorian Government investment has the potential to deliver a $320 million benefit to Victoria's dairy industry, Agriculture Minister Joe Helper said today.

Launching the Dairy Futures Cooperative Research Centre (CRC) at Bundoora today, Mr Helper said the largest single investment in innovation in the Australian dairy industry will give our dairy farmers the knowledge and tools to become even more productive and efficient.

"The Government is taking action to ensure Victorian farmers are productive, sustainable and competitive," Mr Helper said.

"The Dairy Futures CRC has firmly positioned Victoria at the forefront of global dairy research.

"For the first time, dairy research across Australia will be brought together under one umbrella, enhancing collaboration between organisations and maximising returns on investment.

"It will drive innovation in the dairy industry through three programs focusing on improving pasture productivity, driving animal improvement through genomic technology and ensuring industry directly benefits from the new technology."

Mr Helper said the Victorian Government contributed $40 million towards the $128 million research centre with further funding coming from the Federal Government and industry partners.

"The Dairy CRC will train 30 new scientists with Masters and PhD degrees so not only is it investing in dairy research it is also investing in the next generation of Victoria's agricultural leaders," he said.

The CRC is currently headquartered at the Victorian AgriBiosciences Centre in Bundoora and will move, in 2012, to the $230 million Centre for AgriBioscience, a joint initiative of the Brumby Government and La Trobe University.

The AgriBio Centre is generating 390 jobs during construction and will inject around $620 million into the Victorian economy when complete.

Dairy Futures CRC Chairman Mike Ginnivan said the centre's research would provide significant benefits for the Australian dairy industry.

"The Dairy Futures CRC is the largest innovation activity for the dairy industry and we are on-track to deliver benefits worth $320 million to Australian dairy farmers," Mr Ginnivan said.

"At this opening event, early research achievements into designer forage and animal improvement programs will be announced and profiled.

"The industry is eagerly awaiting these new research outcomes, which will directly benefit farmers and their businesses."