After a year of debate and speculation, the Victorian Government has announced a raft of changes to the taxi and ride-sharing industry that will see Uber legalised.

The changes will: replace taxi licences with a single registration system for all ride-share vehicles and taxis; add a $2 levy to every trip taken in a commercial passenger vehicle; ensure all Uber and taxi drivers pass police and driving checks; and create a "fairness fund" to help people with disabilities and those experiencing financial hardship.

"This is the most progressive, the most comprehensive reform agenda anywhere in the nation," Premier Daniel Andrews, told the ABC.

"We are making sure that the law is written to take advantage of the technology that's here now and all that will come hereafter."

Much of today's media has concentrated on the $2 levy per trip, which the Premier says will be paid by the service provider, which makes the decision on how much it will pass on to passengers.

The Government says the levy will last for eight years and help fund the changes. Uber has called on the Government to more fully justify this extra expense, with Uber Victoria general manager Matt Denman telling the ABC that "anything that makes transport more expensive is a bad thing for consumers."

For its part, the Victorian Taxi Association is supporting the broad framework of the changes, while also waiting for more detail on the just-announced policy.

As for taxi licence-holders, the Government will pay them out, with $100,000 for those who hold one taxi licence and $50,000 for those holding a licence to operate a second taxi. Anyone with more than two taxi licences will not be compensated further.

The changes are due to come into effect in 2018.