The Australian Grand Prix is to stay at Albert Park, as long as the event is part of the F1 calendar.
There has been speculation that the race could be moved away from Melbourne to a new circuit at Avalon, but that possibility has now been ruled out due to the costs that would be involved.
As a result, the race will continue to run at the circuit where it has been held since 1996, when Damon Hill won for Williams Renault.
"The Grand Prix is going to stay at Albert Park," Major Events Minister Louise Asher was quoted as telling 9 News
. "One of the reasons the branding of Melbourne has been so successful is that the Grand Prix is at Albert Park."
How long the race will stay at Albert Park is dependent on a new deal being agreed with Bernie Ecclestone, with the current agreement expiring in 2015.
That deal, agreed by the previous Victoria government, has come underfire for rising costs that have been faced by taxpayers and Asher said Ecclestone would face tough negotiations when the time came to discuss a new contract.
"When we come to negotiate we will play hardball," she said. "The contract that the previous government signed is an expensive contract.
"I think taxpayers could get a better deal if the contract had less in it for my good friend Mr Ecclestone and more in it for Victorian taxpayers.
"I would love nothing more to have the Grand Prix stay on a contract that was fabulous value for taxpayers - the issue is whether I can deliver that."