The East West Link is finally dead, but the Victorian government is looking for replacements for the project.
The controversial $6.8 billion road tunnel was put to rest when Prime Minister Tony Abbott admitted in a meeting with Premier Daniel Andrews it would not be built.
Mr Andrews said the "fantastic" meeting on Friday had his government looking for projects to solve congestion and create jobs.
"We're going to do some really hard work in coming weeks and months to identify those projects, and I do hope we'll have more to say about that in the future," Mr Andrews told reporters.
Labor promised to dump the East West Link at the November election, instead promising to put $3 billion of federal money into suburban rail projects. But when asked if he would redirect the federal money to rail, Mr Andrews pointed the media to Mr Abbott's comments.
The prime minister identified the West Gate Bridge in Melbourne's west and the Hoddle St intersection in the east as problems to be fixed.
"These are the choke points of Melbourne traffic and these are the things that need to be addressed by a major new piece of infrastructure," Mr Abbott told ABC radio.
"Now if East West Link is off the table as far as the Victorian government is concerned, let's see what else might be possible that will address these major bottlenecks and which will be worthy recipients of major commonwealth government funding."
Mr Andrews said the two leaders would continue to speak about infrastructure that would benefit Victoria.
The federal government gave Victoria $1.5 billion for the East West Link's eastern stage one, and $1.5 billion for stage two, due to be built in Melbourne's west.
Mr Abbott had previously urged Mr Andrews to break his election promise and build the road.
Contracts for stage one, signed by the previous coalition government, are the subject of negotiations with the winning building consortium, who are seeking up to $1.1 billion in compensation for axing the road.