Victoria's public sector workers will receive annual wage increases of 3 per cent under an updated policy.
Industrial Relations Minister Tim Pallas on Tuesday announced the increase from 1.5 per cent each year to a funded annual increase of 3 per cent.
The change falls under an updated wages policy, which creates the framework for future enterprise agreements with the state's public sector workers.
The policy takes immediate effect including in cases where bargaining has already started for replacement enterprise agreements, the government said.
Workers are also able to get a lump sum sign-on bonus equivalent to up to 0.5 per cent of all agreement costs under the policy.
"Our public sector workers do a great job serving their fellow Victorians and we're proud to support them," Mr Pallas said.
"In addition to wage increases, workers will be able to obtain a sign-on bonus while productivity improvements will bring the potential for further advancement of conditions.
"The policy provides fair outcomes for employees while being responsible as we deal with the types of budget challenges faced by families, businesses and governments across the world."
The Victorian Budget will take into account current economic conditions and deliver on Labor's election commitments, the government said.
