Melbourne Airport has revealed plans for a third runway at Tullamarine.
The new runway will be three kilometres long and will be able to handle big planes, like A-380s.
It will cost $500 million and should take between two and four years to build.
Airport management says the runway is needed to meet the increasing demand from domestic and international airlines.
The number of people passing through the airport is expected to hit 40 million a year by 2020.
The executive director of the Victorian Employers' Chamber of Commerce (VECCI), Richard Clancy, says the new runway will create jobs and be a boon for tourism.
"Certainly without the restrictions that Sydney Airport faces, Melbourne has a competitive advantage," he said.
"A third runway will hopefully enable us to capitalise on opportunities for increased trade and investment and growth in international tourism, particularly from Asia." The State Government is spending more than $6 million on a feasibility study on a rail link to Tullamarine.
Airport chief executive Chris Woodruff says access to the airport will need to improve.
"We're asking the Government to really consider all forms of ground transport, be that better bus services, be it a train link, be it widening the roads to allow more cars to enter the airport," he said.
"Hopefully by the end of the calendar year the Government will be in a position to start making some announcements." Avalon concerns The chief executive of Avalon Airport, Justin Giddings, says the Government should be focusing on developing Avalon rather than Melbourne Airport.
He says it would be cheaper to build a rail link to Avalon.
"It's about $150 million, compared to billions to put a new rail [line] into Tullamarine," he told ABC local radio.
"We've got plans for new runways as well, but they don't go over residential areas.
"All the new runway's going to do at Tullamarine is just put pressure on their non-curfew status eventually and really it's just going to add massive traffic congestion that they've already got."