NEW speed limit signs will be erected to improve safety on local roads approaching railway level crossings in Victoria.

It was first recommended speed limits should be reduced at all country crossings by a government inquiry in 2008, following the Kerang rail disaster the previous year in which 11 people were killed.

"I am proud to say that within the next few months, all Victorian councils will receive the reduced speed limit signs to make more than 170 regional level crossings considerably safer for all drivers,'' Roads Minister Terry Mulder said today.

''In 2008 the former Labor Government reduced the speed limit at level crossings on all high speed roads under the control of VicRoads to 80km/h, but local government roads were not covered.''

Mr Mulder said local councils would now receive funding to reduce the speed limit on local roads that are sealed and currently have a speed limit of 100km/h or 110km/h so they will match the arterial road network.

He said the results of studies in Victoria and Western Australia have shown that drivers comply with reduced speed limits on the approach to high speed, low volume level crossings, even on railway lines which they know carry few trains.

''We believe that level crossings should be made safer regardless of road and rail traffic numbers. Reducing the speed limit on the approach to crossings will improve safety,'' Mr Mulder said.

VicRoads will work closely with municipal councils, rail managers and Victoria Police to help ensure a speedy transition from the existing speed limits to the reduced speed limits.