Victorians are paying $420 million for the state government to walk away from the East West Link road project it dumped as part of an election promise.

A final agreement with the East West Link consortium has been reached, Treasurer Tim Pallas told reporters on Monday.

The cost to the state will be $339 million spent by the East West consortium on design and pre-construction expenses, and $81 million spent setting up a credit facility for the project, he said.

The opposition insists the true cost to taxpayers is up to $881 million, and says the costs continue to climb.

They estimate these costs include $200 million spent in land acquisitions, $176 million in project development such as drilling, soil testing, and engineering, legal and professional services.

Shadow treasurer Michael O’Brien, who signed a controversial side letter guaranteeing payout to the consortium if their project was abandoned, called the walk away costs a “monstrous” waste of public funds.

However, Mr Pallas said the East West Link project is now behind the government.

“While not a cause for celebration, it allows Victorians to move forward and focus on the projects that stack up.”

Mr Pallas said the state government had renegotiated the line of credit for the dumped road project so it would now go towards the building of the Melbourne Metro Rail project.

A $3.1 billion bond agreement would be available for the Metro Rail project, which is estimated to cost up to $11 billion.

The rail project has now secured $4.5 billion in funding, including the $1.5 billion provided in the last Victorian budget.

By Mariza O’Keefe