The Victorian Government will launch a tender process for Australian industry to process brown coal for export.
The Government will release new coal allocations and run a campaign promoting the benefits of coal for the State's economy.
Energy Minister Michael O'Brien says countries like China and Japan are developing low-emissions technology to burn coal for electricity.
He says the Government's campaign will counter a push by extreme green groups to stop coal mining.
"It's an unrealistic agenda that says that we should have an Australia that's powered with no coal," he said.
"We don't believe that's practical. We don't believe that's necessary, because with low-emissions technology there's no reason why you wouldn't continue to use coal.
"But we also have the potential to use it in a high value way."
He says drying the coal in Australia before export will create jobs.
"There are a number of countries [and] a number of companies who have got great confidence that they have technology that can use Victorian brown coal in a low emissions way which has got to be a win win for both the environment and the economy," he said.
The Mayor of the Latrobe City, Ed Vermeulen, says the region has 400 years supply of brown coal still in the ground.
"We need to pursue that kind of future," he said.
"To ignore the resource here locally would be just folly and would be to our economic dteriment as a State and as a nation."
Mark Wakeham from Environment Victoria says the Government's coal strategy is unlikely to create new jobs.
He says billions of dollars worth of coal contracts were offered 10 years ago with little response.
He says the Government is promoting so-called clean coal technologies that do not exist.
"Ted Baillieu seems to be chasing these phantom jobs in polluting industries that are very unlikely to materialise" he said.
"We're ignoring some real clean energy jobs in industries like the wind industry and the solar industry and the State Government's actually withdrawing support from those genuinely clean industries."
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