And the former treasurer has warned the decision – which was a state election promise – will add an extra $25 million a year to Victoria's public sector wages bill.

Small Business Minister Adem Somyurek said the government would soon gazette the new holiday. He said the government was working on a regulatory impact statement, including community engagement on the costs and benefits of the holiday and another new public holiday on Grand Final eve.

Former premier Ted Baillieu lifted a ban on Easter Sunday trading in 2011, but did not make it a public holiday. Labor says the changes will come into effect this year and would make sure shift workers were fairly paid.

"Easter Sunday is no ordinary Sunday. It is a time to spend with family, friends and loved ones. This is about making it fairer for those who have to spend that time at work instead," Mr Somyurek said.

But the business community does not share Labor's view, with many employer groups criticising the decision. The Restaurant and Catering Industry Association lodged a strongly worded submission with the government late last month, urging a rethink of its election pledge.

"The proposal to gazette Easter Sunday as a public holiday is of grave concern," it said. "Penalty rates ... would make it unviable for many businesses to trade on this day, resulting in a significant loss in revenue and economic activity across the state."

Ray Good, the owner of the popular Hooked fish-and-chip shops in Melbourne, said he would not trade during the day on Easter Sunday for the first time in almost a decade.

"Easter is traditionally when people want to eat fish and Good Friday is the busiest time of the whole year for us, but now we can't justify opening the door on any other day that weekend," he said.

"It's not viable … it's not an ideal situation."

Mr Good said he was still deciding whether it was worth opening any of his three locations at night on Saturday, Sunday or Monday with only a skeleton staff.

"Even then it's a punt … are we going to break even? After nine years of being open, this is where we are at, unfortunately."

In government the Coalition had Treasury cost Labor's policy, which would affect thousands of public sector workers including police and nurses. Shadow treasurer Michael O'Brien said the policy would add an extra $25 million to the state's annual public sector wage bill. Grand Final Eve would add $32 million.

"Labor is giving a $25 million payoff to public sector unions for no additional work, Victorians are losing out on the equivalent of a brand new train or one-and-a-half new schools each and every year because of Labor's deal with the unions," Mr O'Brien said.

National Retail Association chief Trevor Evans warned the new holiday would mean the retail sector would be "basically shut for four days straight".

He said Easter Sunday was traditionally when stores reopened after consecutive days closed.

"The people who suffer will include retail workers whose businesses close or they don't get offered a shift, and consumers will suffer because they won't be able to access most shops for an extended period."

Mr Evans said public holiday penalty rates were important in the retail sector, but should be set at a "more realistic" rate of time-and-a-half as opposed to double time-and-a-half.

The Victorian Trades Hall Council welcomed the decision, applauding Labor for reinstating the holiday that had been removed by the previous government.

"When workers sacrifice holidays, penalty rates give fair compensation," secretary Luke Hilakari said.