EXCAVATORS tore down Lake Mokoan's dam wall this month, putting an end to irrigators' eight-year battle to retain the 365,000-megalitre storage.

The Government removed the wall as part of its plan to revert the lake to a wetland and save an average 50,200 megalitres a year in evaporation and seepage losses.

Water Minister Tim Holding said the water savings would be used to boost the Goulburn, Murray and Snowy Rivers' environmental flows.

But former Broken system irrigator Ray Henderson said the breaching of Lake Mokoan's dam wall was the "final act" in a drawn-out battle that spelled the end of viable irrigation in the valley.

"We've gone from having 400,000 megs of storage down to 40,000 megalitres," Mr Henderson said.

Irrigators must now rely on the Broken Valley's remaining storage, Lake Nillahcootie - which only has a capacity of 40,400 megalitres.

But the Victorian Government said the loss of Lake Mokoan had been offset by buying and extinguishing 8000 megalitres of Broken system entitlement held by 50 irrigators, including Mr Henderson.

The purchasing program was aimed at maintaining irrigators' reliability of supply by extinguishing the 8000 megalitres and reducing the number of irrigators on the Broken system to 130 and demand for water.

A spokeswoman for Goulburn Murray Water said the Government had promised irrigators the decommissioning of Lake Mokoan would ensure their reliability was kept at 91 per cent.

Mr Holding said Lake Mokoan was the state's most inefficient storage and had been losing three in every four litres of water it stored.