NORTHERN Victoria's 7600 irrigators face funding 10 per cent of the $1.06-billion second stage of the Northern Victoria Irrigation Renewal Project.

On Saturday Prime Minister Julia Gillard signed off on $952.8 million, covering 90 per cent of stage two of the NVIRP. But irrigators fear they will be left to fund the remaining $106 million.

Victorian Water Minister Tim Holding's office said no decision had been made on the issue.

Goulburn Murray Water's irrigators are already contributing $100 million towards the $1 billion cost of stage one of the NVIRP, with Melbourne Water's customers covering $300 million and the Victorian Government the remaining $600 million.

Victorian Farmers Federation water council chairman Richard Anderson said irrigators could not afford to contribute another $100 million to stage two of NVIRP.

"Has GMW had a look at the operational and maintenance costs of the new modernised system and then factored in $200 million more?" Mr Anderson said. "I just don't think irrigators can afford it."

But irrigators are gaining a third of the estimated 225,000 megalitres of water savings recovered from stage one of the project, worth about $150 million.

GMW irrigators also expect to gain half the 200,000 megalitres saved from stage two of the NVIRP, worth about $200 million.

Both stages of NVIRP are expected to be completed by 2017-18, delivering an annual average total of 425,000 megalitres in water savings.

Of these savings, 75,000 megalitres will supply Melbourne, via the controversial north-south pipeline. The remaining 350,000 megalitres will be split between irrigators and the environment.

The cost to the Federal Government for its share of the water savings for the environment across both stages of NVIRP is $5444 a megalitre.

Premier John Brumby welcomed the Prime Minister's announcement.

"We know how important it is to keep our farmers ahead of the game and that's why we have been making generational investments in upgrading our Food Bowl irrigation system," Mr Brumby said.