Roads and Ports Minister Tim Pallas said the 2-year WestLink study would also consider upgrades to Sunshine and Paramount roads and Dempster Street, and a road to connect the tunnel with the Western Ring Road.

"WestLink is an important project for Melbourne that will reduce over-reliance on the West Gate Bridge, cater for the planned expansion of the Port of Melbourne, remove cars and trucks from local roads, create more jobs and improve our way of life," Mr Pallas said.

Footscray MP Marsha Thomson said community consultation would be central to the project's development.

"If people engage with WestLink they can take those concerns on board and look at how they can best address them ... it's about getting the best possible outcomes for people."

But No Freeway 4 West Footscray's Claire O'Sullivan said that, so far, residents' views had not been taken into account.

"We find it an affront that residents of Footscray and Seddon will be 'protected' by the tunnel, but the residents of West Footscray and Sunshine [where the tunnel emerges] are left to fight for themselves, which we will do as there's too much for us to lose."

Advocacy group LeadWest, Victoria University's Institute for Logistics, Supply Chain Management and Maribyrnong Council all welcomed the study.

Mayor Michael Clarke said traffic-clogged streets in the City of Maribyrnong were a long-running issue. "Through the delivery of a number of projects as part of the Victorian Transport Plan, the Government is rising to the occasion to relieve traffic congestion in the inner-west, and we welcome the focus on our city in the delivery of these projects."

The institute's Pieter Nagel said the tunnel would be the first step in making Melbourne a more connected and efficient city.

"Overall east-west connectivity, that is right through to the Eastern Freeway, needs to be foremost in the minds of the planners. Without that, the additional pressure on the congestion around the port may impact on port productivity," Dr Nagel said.