Fresh Plan Pty Ltd chief executive Rod Kerley said the centre, expected to cost at least $60 million, would provide about 300 permanent jobs for workers ranging from forklift drivers to computer experts.

The South Eastern Fresh Distribution Complex would be built in three stages in Dandenong, with the first ready for business as early as next year, Mr Kerley said.

Local growers from Devon Meadows and Koo Wee Rup are involved in the plan, which gives them the opportunity to be directly involved in the ownership and management of the centre.

Mr Kerley said the proposed Bunyip food belt concept, in which recycled water could make the Bunyip Basin area Melbourne's next food bowl, was a perfect fit with the centre.

"We believe a Dandenong centre will both reduce food miles for produce from this area and create an economic way to distribute the food it creates."

Mr Kerley said negotiations were under way with the State Government regarding their preferred site at Dandenong's Logis industrial park. If they fell through, the complex would be built at the Pellicano industry park, also in Dandenong.

"Either way, it will happen and will start sooner rather than later. The plans are ready and people are committed to it," Mr Kerley said.

He said the centre would offer huge flexibility to retailers to collect orders from a range of suppliers in one pickup at the 24-hour complex.

"The aggregation service will enable these groups to service their customers more efficiently with the effect of significantly reducing handling and distribution costs."

Local employment co-ordinator for the federal Keep Australia Working program, Keith Pimblett, hailed the initiative.

"This will open up lots of jobs for kids as well as providing opportunities for people in the disappearing manufacturing sector."

Narre Warren North MP Luke Donnellan, who has helped facilitate the project, said the concept was well supported by fruit and vegetable growers in the south east.

"It's a major vote of confidence in the local community in the south east as a major hub for manufacturing and distribution, and will further add to Victoria's place as the major job generator in the country."