The Victorian Government has announced it will not place an order from the Wonthaggi desalination plant for the coming financial year.


Water Minister Peter Walsh said solid rainfalls had left water storages at healthy levels and would not need to be bolstered by the plant.


"Melbourne's dams are holding almost 1200Gl and we are coming into the winter/spring filling season with wet catchments," Mr Walsh said.


"It's also clear that the plant will not be fully completed by the original completion date of 30 June 2012.


"AquaSure has advised the plant is not expected to be fully completed and have passed all reliability tests until February 2013, well into the financial year, although the plant will produce water until reliability testing is complete," Mr Walsh said.


"Given we don't need the water and we are already contractually obliged to pay for water produced during commissioning, we believe the most responsible course of action is to save this money."


Water orders are determined based on a range of factors including the cost to customers and the need to manage water security through the analysis of supply and demand, water storage levels and management, and a range of future weather scenarios.