SUNRAYSIA'S irrigation system will be modernised to the tune of $103 million as part of a Murray Darling Basin Plan deal.

Victorian agriculture minister Peter Walsh said the Federal Government had confirmed the cash recently in a letter.

"The Commonwealth has now firmly committed $103 million for modernisation works for the Sunraysia district, in return for receiving seven gigalitres of water for the environment," Mr Walsh said.

He said the Victorian Government would submit a revised business case.

"The realisation of this project will mean Sunraysia growers will be able to make investment decisions for their businesses knowing that they will be operating with efficient irrigation infrastructure," he said.