WIMMERA irrigators have offered to sell all their water to the Federal Government for $54.4 million, ending more than a century of tradition.

The region's 210 irrigation licence holders have agreed to shut down the system, delivering 34,000 megalitres to the government.

Wimmera Irrigators Association secretary Jim Delahunty said the group was the first in the Murray Darling Basin offering to completely shut down its system.

The shutdown would deliver the irrigators' consumptive pool of 19,000 megalitres to the government, plus 9000 megalitres in delivery losses and up to 6000 megalitres in storage losses.

The Grampians Wimmera Mallee Water board has agreed to hand ownership of the losses to the irrigators to create the 34,000 megalitre pool on offer.

Mr Delahunty said irrigators lodged their offer to sell the water at $1600 a megalitre to the Commonwealth last week.

"If we don't get close to $1600 a megalitre then we'll have to return to GWM, the State and Federal governments to seek assistance to modernise our (irrigation) system, which is what we tried to do in the first place," he said.

He said the association had surveyed all 210 licence holders. The 174 who responded said they would sell at $1600 a megalitre.

But the appeal of the water to the Federal Government will depend on how it values Wimmera entitlements, given it does not flow into the Murray River and has delivered just one allocation of 5 per cent in the past seven years.

However, Mr Delahunty said the drought had driven allocations to zero and irrigators' entitlement could deliver full water entitlement in at least 71 years out of 100.

"The reliability of the delivery and storage losses would be even higher," he said. "Ultimately this proposal will benefit the environment given the Wimmera River is heritage listed and flows into the RAMSAR-listed Lake Albacutya."

The Federal Government has already shown its willingness to pay $2250 a megalitre for low-reliability entitlement in NSW's Gwydir Valley, which has a reliability of 35 per cent, compared to the Wimmera's 71 per cent. The Government has spent $167 million on 74,426 megalitres of Gwydir irrigators' entitlement.