MELBOURNE is to get $1.2 billion container port which will create 2500 jobs and won't cost taxpayers a cent.

The Herald Sun says the Victorian Government will announce the project today, which will be paid for by the Port of Melbourne Corporation and the private sector.

It is the first major project by the Baillieu government since being voted in almost 18 months ago.

The Herald Sun reports that the massive project, which will change the landscape of Melbourne, will employ 700 people directly, including 540 in construction.

Another 1900 jobs will be created indirectly, adding to the 15,700 jobs currently supported by the port which will be finished by 2016.

The Herald Sun says the container port will be built at Webb Dock, at the top of Port Phillip Bay, and will compete for business against the two operators at Swanson Dock.

It will increase handling capacity to up to $100 billion worth of trade a year.