Premier Jacinta Allan will announce the discounts for train, tram and bus travel across Victoria on Sunday.
It is designed to relieve demand for petrol and diesel by making it more affordable for commuters to ditch their cars amid global fuel supply constraints.
The policy extends free transport through May and halves fares from June 1 until the end of 2026.
"As premier, I'm determined to do everything in my control to help Victorians who are under pressure," Ms Allan said in a statement.
"I know this won't solve every problem, but it's another step I can take to help Victorians right now."
From June 1, Myki fares will be capped at $5.70 a day, half the usual cap of $11.40 a day.
The average daily commuter will save more than $850 across the six months, the government claimed.
The move will cost $432 million in foregone revenue, according to the government, adding to the estimated $70 million price tag for free travel in April.
The cost-of-living relief measures will be key features of the upcoming state budget, to be released in May, and come amid an election year.
Concerns about global fuel supply have abounded since Iran all but closed the Strait of Hormuz in response to the Israeli-US attack.
A fire at one of Australia's two remaining oil refineries late on Wednesday raised further questions about domestic fuel supply.
The Viva Energy Geelong refinery, southwest of Melbourne, supplies more than half of Victoria's fuel and about 10 per cent nationwide.
The refinery is operating below full capacity but Viva has assured the public consumers will not be impacted.
"I think there will be no impact to what we supply into the Victorian market as a result of this incident. I'm very confident of that," chief executive Scott Wyatt told reporters on Friday.
18°C