Premier Steve Bracks on Monday confirmed that an announcement would be made "very soon" on the future of the coal-fired power station in Victoria's east which supplies almost one quarter of the state's energy needs.
"I won't preempt an announcement that will be made in the near future," he told reporters on Monday.
Green groups protested outside Monday's state cabinet meeting in the belief the government has already struck a deal with the power station, allowing it to continue operating with its current level of greenhouse gas emissions.
Environment Victoria executive director Marcus Godinho said green groups recognised the power station's contract allowed it to operate for the next 20 years.
But the government should use that time to phase out reliance on what environmentalists have dubbed the industrialised world's dirtiest power station.
"That's enough," Godinho said outside the government offices on Monday.
"The government should not be giving any coal away after that.
"If they give away any coal at all it would be a terrible environmental legacy for Steve Bracks to leave."
British company International Power, which owns 90 per cent of the 40-year-old facility, wants to extend operations to 2031.
It needs planning approval to move a river and a road to gain access to 350 million tonnes of cheap but highly-polluting brown coal which is heavily used in Victoria's power industry.
But it must also reach an agreement on the amount of its greenhouse gas emissions before the state government will issue the new mining licence needed for a 90 million tonne section of the new coalfield.
A spokesman for Energy Minister Theo Theophanous refused to say if the government had reached a deal with power station or when it would be announced.
Comment was being sought from International Power.
Source: AAP NewsWire