Victoria will also provide $60,000 to East Timor over the next three years to train nurses for a new dental clinic.

Espionage claims have dogged the relationship between the federal government and East Timor in recent years - with no Australian minister visiting the country since 2013.

But Victoria's Planning Minister Richard Wynne travelled to East Timor this week, meeting Prime Minister Rui Araujo and local leaders ahead of a presidential poll this month and parliamentary elections later in the year.

Mr Wynne told Fairfax Media there was hope in East Timor of settling the maritime boundary dispute with Australia after the two countries agreed in January to cancel a controversial treaty at the centre of spying allegations.

East Timor also agreed to drop a legal case, having accused Australia of eavesdropping on the country's cabinet office.

"Cautious optimism would be the way to describe it, that there can be a just outcome in the renegotiation," Mr Wynne said.

The Victorian support to East Timor is entirely separate from Australia's official aid program, and Mr Wynne said the small conference centre in Balibo, with facilities for up to 50 people, would boost local employment.

Mr Wynne said this was his fourth trip to East Timor, and that his interest in the country dated back to the years of Indonesian occupation.

Balibo, a small village in the country's west, was the site where five Australian TV network journalists were cut down by invading Indonesian troops - a story told in a 2009 film of the same name.

Mr Wynne said the Victorian government has supported the Balibo House Trust, the board of which includes Shirley Shackleton, wife of Greg Shackleton, the Channel 7 journalist who made a haunting last broadcast from Balibo before he was killed.

The patron of Balibo House Trust is former Victorian premier Steve Bracks, who also acted as a special adviser to Xanana Gusmao when he was East Timor's prime minister.