A protracted legal battle between the Victorian Government and the builder of a billion dollar desalination plant has been resolved.

The $1.3 billion legal battle between the Victorian Government and the company Aquasure saw the builder claim compensation for weather events, industrial action, community protest and other matters, reports say.

Victoria’s Water Minister, Peter Walsh, says ongoing legal costs will be avoided and that the settlement will not require the Government to outlay any extra funds.

A deal has been struck that will see the fixed charge to the Government for the plant become lower each year, while a broader agreement to refinance the project early will give Aquasure significantly lower financing charges.

Mr Walsh says the changes will mean reduced water bills for residents beginning sometime next year.

“This change will be reflected in water bills most like post-Christmas, so it will be in the third and fourth quarter of next year, he said.