More than $10 million will be invested by the state government to upgrade walking and cycling tracks and river infrastructure along the trail.
Loop and spur trails will separate from the main route to provide additional adventures.
The works are expected to attract 55,000 extra visitors each year to cities and towns along the trail, which extends for more than 1000km from Lake Hume to Mildura.
Echuca Moama Tourism chief executive Kathryn Mackenzie said the funding was great news.
“It's an opportunity to develop new experiences along the river,” she said.
“It makes the communities along the river even more attractive to a new market. Visitors are becoming more sophisticated in terms of what they want.
“Outdoor activity, even through COVID, has been a huge thing for people and is a growing market, and we are excited to be able to add a new offering accordingly.”
Ms Mackenzie said it was exciting to see a focus on the continued development of the area.
“You need thing in the wings, new ideas coming through to continue to drive tourism through the region, so we are thrilled to be a part of it,” she said.
The Victoria Tourism Industry Council also welcomed the announcement.
“VTIC has worked closely with industry to identify critical infrastructure projects that could help to support recovery of the sector and drive improved tourism outcomes across the state,” VTIC chief executive Felicia Mariani said.
Regional Development Minister Jaclyn Symes said bringing tourists back through the region — particularly in light of the COVID pandemic — was essential.
“Tourism is so important along the Murray, attracting visitors back to these regions will be crucial to help businesses and towns recover.”
Tourism, Sport and Major Events Minister Martin Pakula said he expected the funding to make a major difference to the tourism market.
“This funding will make these trails even more popular — bringing visitors to towns in northern Victoria to spend money and support local businesses,” he said.
“We’re investing in local tourism projects across the state to support jobs and help communities rebuild.”