The Dja Dja Wurrung Aboriginal Clans Corporation has received a $1.82 million federal government grant to research the viability of growing Kangaroo Grass.

The native plant is of cultural significance to the Dja Dja Wurrung people.

"It doesn't need what you would call artificial inputs like fertiliser or pesticides," Dja Dja Wurrung Clans Aboriginal Corporation chief executive Rodney Carter said.

"The soil is currently suitable and it can grow with the existing rainfall.

"To put it simply, if we can apply this plant to grow in an agriculture context as a crop, then we can use modern equipment to sow seed and for harvest."

The project - which will also involve La Trobe University, Goulburn Murray Water, and Federation University - will be delivered in three stages across four years.

The Victorian Department of Agriculture, and the Department of Land, Water and Planning will also be part of the project, which will be completed in 2023.

The traditional owner group is still deciding on a location for the project, although the Eppalock or Kamarooka areas are in consideration.

"This is brilliant for traditional owner groups to do the field trial," Mr Carter said. "Although the focus is on agriculture, there will be many other positive benefits.

"These plants will help insect health and soil moisture retention. If there are more insects and a more suitable habitat, then it's better for the environment and the food chain.

"They will all benefit. It will be really significant."

Mr Carter said the work in central Victoria could lead to similar projects with other native plants around Australia.

"The project is about proving the concept will work," he said. "Once the concept is proven, then we will be able to transfer it to different types of landscapes and plants."

Federal Minister for Agriculture, Senator Bridget McKenzie, said the project could be a game changer.

"Our government sees great benefits in this innovative approach by Dja Dja Wurrung Clans Aboriginal Corporation to increase the size of seed production areas by using science-based evidence to select best yielding varieties for application to varying climates and growing conditions," Minister McKenzie said.