The decision to end native timber logging was meant to bring certainty to Victoria's timber towns. But for the people living in those communities, the decision to shut down the industry by the end of the year has raised more questions than it has answered.

In the past year, several timber mills have stopped operating or closed and in the past six months the state's only paper mill stopped producing white paper.

Sawmill workers, loggers, and log truck drivers now all have an end date on their jobs.

The Victorian government used Tuesday's budget to deliver the final blow and announced an allocation of $200 million to help with the transition away from the industry.

The funding brings support for the sector to $875 million, which includes existing support services for workers and money to transition to plantation timber.

The government also announced there would be new hardwood plantations established, but mills are sceptical about availability.

It has been a difficult couple of days for the timber community of Powelltown, east of Melbourne.

Powelltown Sawmills chief executive Daniel Pote said the announcement was a "sad day" for all involved.

"That took us all by surprise and there's a lot of shock … a lot of adults who yesterday were in tears and worried about their job — it was devastating news," he said.

In the past few years, Powelltown Sawmills bought new machinery to produce hardwood products as it worked towards an end date of 2030.

"A lot of equipment we use will be redundant and won't be able to be used in other industries," Mr Pote said.

"So it makes it really difficult to get that return on investment for some of that equipment.

"But at the moment, we're just trying to work out exactly what's going to happen over the next period of time for all our workers."

Eighty per cent of workers at the small town's mill live within 10 kilometres of the workplace, leaving many with not just job uncertainty but a fear of having to relocate their families.

Flow-on effects

Peter Podolinsky has lived in Powelltown since he was a toddler and while he has never worked in the industry, he has reaped the benefits of living in a timber town.

His football club was started 100 years ago by smaller mills that started a league to play against one another while raising money for charity.

Most of the players are sawmill workers or what Mr Podolinsky calls "offshoots" — tradies and their partners who work with the wood provided by the mill.

The town's sporting clubs are all sponsored by local businesses.

"The whole timber industry across the board has been very, very generous with their support to cricket, football, netball, in forms of not just in sponsorship but they've always lent machines to do things or whatever, whenever we ask for something," Mr Podolinsky said.

"They're there, they're helping and they're just a terrific, terrific asset to communities like this."

Other than monetary support for community clubs and families, Mr Podolinsky told the ABC the absence of the skills and equipment the mill had on hand would be felt in times of emergency.

"I have a real area of concern in bushfires having been here in the '83 Ash Wednesday bushfires, and knowing how people within the timber industry contributed towards that firefighting when it gets to that crucial point," he said.

"Once those people with those skills to drive the machines, the bulldozers the excavators — once they've gone off to other things, it will be a very interesting time in the event of another bushfire."

Premier cannot 'pretend' to keep logging

Victorian Premier Daniel Andrews said the government's decision to bring forward the end of the industry was driven by the reality of the situation.