The Victorian Government has announced an ombudsman's investigation into water saving projects in Northern Victoria.

The Water Minister, Peter Walsh, says the Labor Government failed to deliver the food bowl modernisation project in an open, transparent manner.

He says the ombudsman will investigate the project's management and the methods used to estimate, verify and allocate water savings.

Northern Victoria's irrigation network is being modernised, with the water saved to be shared between irrigators, Melbourne and the environment.