Agriculture Minister Joe Helper said the project would map genes in cows and use thousands of markers to determine which cows would produce most effectively.

"Genetic gain currently contributes approximately $15 million to the Victorian dairy industry per year; and this project is expected to raise the value of genetic gain to more than $30 million per year," Mr Helper said.

"The project will double the rate of genetic improvement in the profitability of dairy cows.

"Farmers will be able to select young sires with more confidence in their daughters’ production."

Dairy Australia and DPI will jointly invest more than $2.3m in the project's initial 18 months, with both organisations coordinating the research effort from scientists across the country.

Dairy Australia chairman Max Roberts said the research teams had been making good progress and had created a powerful platform from which to continue.

"This project was selected for its potential to bring tangible and significant returns to the dairy industry. Bringing these teams together will mean that the best scientific minds in Australia from across three states will be collaborating to achieve that," Mr Roberts said.