Water Minister Lisa Neville is taking a leave of absence from her position for three months, after complications associated with an auto-immune disease.
Local Government Minister Richard Wynne will cover Ms Neville's portfolio responsibilities.
Ms Neville said medical professionals had advised her to take the leave, for further treatment and recovery, for complications associated with Crohn's disease.
She said she had lived with Crohn's disease for over 32 years and had successfully managed it throughout her life.
"Over the past few months, I had been managing the most recent episode from home, however my condition progressively worsened and required hospitalisation last week," she said.
"Through the course of the past week in hospital, the seriousness of these complications and the impact on my health has become more evident.
"Crohn's is a chronic disease.
"Many people in the community live with this condition, and to date I have successfully managed the effects of it. "
Ms Neville said the current episode was the worst she had been confronted with.
"The clear advice from my doctors is if I don't take this period of rest and recovery I will be faced with major bowel surgery and risk long-term consequences to the quality and length of my life," she said.
Premier Daniel Andrews said on behalf of the government he extended his warmest wishes to Ms Neville for her recovery.
"She is a highly-valued, relentlessly-dedicated member of our team," Mr Andrews said.
"She has our full support in taking the time to focus on her recovery, and we look forward to welcoming her back as soon as her health allows."
Yea beef producer Jan Beer, a prominent water campaigner, hoped Ms Neville recovered well and with rest could return to her post.
Ms Beer said Ms Neville had a good grasp of all water issues and she was worried Mr Wynne did not.