A regime to conduct variable summer flows in the Goulburn River will be in place before this season's peak demand period.
As flagged in May, the Victorian government took the action "to secure the long-term health of the Goulburn River and provide a level playing field for all water users in northern Victoria".
Water Minister Lisa Neville announced a review of the inter-valley trade (IVT) rules for the Goulburn River following concerns about the environmental impact of prolonged high volumes of water.
The last two years had seen very high deliveries from the Goulburn IVT account to the Murray system due to drought conditions in NSW coupled with strong trade demands in the Murray system over summer.
Prior to 2013-14, deliveries averaged about 60 gigalitres but jumped to 320GL in 2017-18 and 433GL in 2018-19.
"Announcing these changes before the season starts enables people to make early decisions on when they move water, striking the right balance with community consultation and protecting the health of the Goulburn River before this summer," Ms Neville said.
"We want a sensible approach to managing this issue that gets water to users who need it, but not at the expense of the lower Goulburn River environment."
Victorian Farmers Federation Water Council chair Richard Anderson said the announcement was part of a bigger picture looking at deliverability of water.
Mr Anderson said the question was "is it physically possible just to get enough water down the river in peak periods?".
"You can only push so much water down," he said.
"What is the impact of continuously running water in the river at top of bank?
"This may be a stop gap while consultation and modelling takes place to find whether it can be done or how it could be done."
Mr Anderson said that during the high risk period of December and January there were serious impacts for irrigators down river if water could not be delivered in peak demand.
He said there were serious problems for irrigators planning if they could not get their water when they wanted it.
It was a problem for Victoria, the South Australia river land and NSW - "how we share the resource and capacity of the river".
Mr Anderson said the announcement would be supported by some and not by others.
The government said ongoing monitoring and advice from a scientific expert panel had confirmed that prolonged high unseasonal flows were causing the damage to the river banks, loss of vegetation and a reduction in habitat for native fish.
The initial review had identified that the current rules were not protecting the environment of the lower Goulburn River and did not provide a level playing field for all water users to trade water.
In particular, tagged water moving from the Goulburn to the Murray outside the limits of the IVT trade rules, had increased from less than 10 GL in 2012-13 to 120 GL in 2017-18.
The announcement would meant the introduction of "an interim operational regime that achieves variable summer flows in the Goulburn well below recent volumes, to be implemented before the high-risk period begins this summer".
The government would also ensure that from December all trades from the Goulburn system, including water use from tagged accounts, would be treated consistently with Victorian rules for inter-valley trade and in line with Basin Plan trading rules.
Public consultation would also start in January 2020 about the long-term options to change the current Goulburn to Murray trade rule to maximise trade opportunities within environmental thresholds.