Gas connections will be banned in Victorian homes and government buildings built from next year.
The Victorian Government announced the changes on Friday as part of its plan to reach net-zero emissions in the state by 2045.
From January 1 next year, new residential properties and government buildings will only be powered by electricity.
Energy Minister Lily D’Ambrosio said the changes would help new home owners save $1000 on their energy bills.
“We know the cost of living for Victorians is getting bigger and bigger,” she said.
“Doing something about it is exactly what today is about.”
There will be changes to Victorian planning provisions and schemes to ensure the changes can come into effect.
About 80 per cent of Victorian homes are connected to gas, with the sector contributing about 17 per cent of the state’s emissions.
“Reducing our reliance on gas is critical to meeting our ambitious emission reduction target of net-zero by 2045 and getting more Victorians on more efficient electric appliances which will save them money on their bills,” Ms D’Ambrosio said.
She said a new $10 million residential electrification grants program would be established.
The scheme will be available to volume home builders, developers and others to provide bulk rebates for solar panels, solar hot water and heat pumps to new home buyers.
It is a move that has divided providers, environment groups and other stakeholders.
The government is also updating its gas substitution roadmap, which will be released later this year.
The government added it will work closely with industry including gas appliance manufacturers, the building and construction sector, local government, trade unions and consumer organisations to manage business, workforce and consumer impacts and support the sector in the transition.
The Australian Pipelines and Gas Association criticised the ban, saying the government should instead introduce renewable gas like hydrogen into the system.
“Preventing new homes from connecting to gas now will not lower emissions, will not lower costs and will cut people off from the opportunities of the future," chief executive officer Steve Davies said.
But other groups are backing the changes, with Environment Victoria describing it as a vital step towards ending the state’s addiction to gas.
The Clean Energy Council said electric homes were more efficient, better for the environment and cheaper to run, but Victoria's push shouldn't stop at new builds.
“All Victorian households and businesses will ultimately need to switch from gas to renewable electricity,” director Anna Freeman said.
“The updated gas substitution roadmap must set out a clear strategy for managing this transition in an orderly but accelerated manner.”
Master Builders Victoria also welcomed the shift away from gas but said it was important consumers had the freedom to make informed choices.
“State and federal governments must continue to engage with industry stakeholders to develop comprehensive policies that consider the varied energy requirements of different consumers and building types,” chief executive officer Michaela Lihou said.
All-electric homes also improved residents' health outcomes because gas stoves exposed people to respiratory irritants, the Royal Australian College of GPs said.
Victoria is not the first jurisdiction to take action on gas, with the ACT to prohibit connections in new suburbs or infill developments by the end of the year.
Building sector groups including Frasers Property Australia and Cbus Property have also pledged to phase out gas cooktops.
The Victorian Greens welcomed the government's changes but said the state was falling short by approving new gas drilling projects.
Shadow Treasurer Brad Rowswell said gas was an important part of Victoria's energy mix and the government was rushing through the ban.
— AAP