During a wide-ranging speech to the Victorian Rural Press Club, Mr Walsh said the previous government had not delivered key projects, including the Food Bowl Modernisation Project.

"The Coalition Government is delivering on its commitment to investigate the probity of key water savings projects including the Food Bowl Modernisation Project," Mr Walsh said.

"The Auditor-General has previously produced two reports which were critical of the Food Bowl Modernisation Project.

"With the majority of the project yet to be delivered, I believe it is prudent to put the concerns about these projects behind us and determine what can be done to improve their future delivery.

"I have formally written to the Ombudsman asking him to consider investigating Northern Victoria Irrigation Renewal Project and Goulburn-Murray Water over their handling of the project.

"The Ombudsman has stated that he will investigate the matter. He will set his own terms of reference for the inquiry and I am confident that, with powers similar to a Royal Commission, he will give advice as to how the Coalition can best deliver the remainder of these projects.

"The Ombudsman will focus on the effectiveness of the project's management, oversight and governance and the rigour of the methodology for estimating, verifying and allocating water savings."

Mr Walsh said delivery of the project would continue while the Ombudsman conducted his inquiry.

"The inquiry is an invaluable opportunity to improve the outcome of these projects, to minimise risk and ensure Victorian taxpayers, food producers and the Commonwealth receive value for money.

"The concerns held by northern Victorian communities need to be heard.

"At the completion of these projects we must ensure that northern Victoria is left with a vibrant and viable irrigation community," Mr Walsh said.