Lockhart Shire, Greater Hume Council and Federation Council will receive federal money for projects and infrastructure to help alleviate the pressure from ongoing drought.

Lockhart Shire Council general manager Peter Veneris said the funding was a great boost for the region generally.

"Many of the projects individual councils undertake in their own government areas, whether they be road upgrades or economic development and tourism projects, have a regional benefit," he said.

Mr Veneris said there were opportunities to improve the movement of road freight and to support economic development and tourism-related projects.

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He said the region was now in its third consecutive year of below-average rain.

"Isolated areas of the shire are getting a crop, however yields will be lower, whilst other farmers have already decided to cut their crops for hay ... stock water in many areas is getting low," he said.

Shire Mayor, Rodger Schirmer said funding, which comes federally, is always welcome. He said there were infrastructure backlogs and this would help council to address these demands.

Deputy Prime Minister Michael McCormack said the funding, under the Drought Communities Programme Extension, was part of a $1 billion extension of the government's existing drought relief.

In addition to the Drought Communities Programme, the next round of Building Better Regions Fund will be available to 128 local government areas which have been made eligible. These areas will also received additional Roads to Recovery Funding.