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.

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

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

LeadWest chief executive Anton Mayer said he was delighted the Government was acknowledging that the western suburbs, as the fastest-growing region in the country, required major new infrastructure.

The study will include:

A community consultation program and community reference group.

Geotechnical investigations to evaluate ground conditions for tunnelling.

An analysis of current and future traffic demands.

An audit of social and environmental impacts, including ways to minimise the properties affected.

Meanwh ile, more than 100 people gathered in Footscray on Saturday to protest against the Government's planned road tunnel.

No Freeway 4 West Footscray's Claire O'Sullivan told supporters the Government had failed to listen to residents.

She also questioned how it could promise to protect certain suburbs in the west but not others.

"We find it an affront that residents of Footscray and Seddon will be protected during the tunnel project, but the residents of West Footscray and Sunshine are left to fight for themselves."