The federal and state leaders and key ministers are expected to jointly announce that a deal has been struck between Alcoa and power supplier AGL, ensuring the doors are kept open at Alcoa's 30-year-old smelter. Fairfax Media understands final details of the deal were still being nutted out on Thursday.

Premier Daniel Andrews will break his holidays to fly to the state's far south-west with industry minister Wade Noonan for the announcement, also made possible by a $240-million assistance package from the state and federal governments.

The Prime Minister was in Victoria on Thursday and was expected to continue his visit with a trip to Portland. Energy minister Josh Frydenberg is also expected to fly to Portland. Outgoing Industry minister Greg Hunt - this week appointed health minister - is also expected to attend.

The package was offered to Alcoa in December, after a huge power outage crippled the smelter and left it operating at about one-third capacity, with its future and hundreds of jobs left in doubt.

But with a deal now struck, questions remain about the wisdom and fairness of continued subsidies to a smelter located 500 kilometres from its power source given Victorian taxpayers and energy users have already tipped in billions of dollars over three decades.

Fairfax Media understands union leaders are  travelling to Portland on Thursday night in anticipation of a Friday morning event. Both governments are likely to focus on the importance of the deal to the politically-charged protection of hundreds of regional jobs.

Alcoa and AGL have been entangled in difficult negotiation for weeks, with both Prime Minister Malcolm Turnbull's office and Premier Andrews intervening to encourage resolution.

At a marathon 12-hour meeting on Sunday, chaired by State Treasurer Tim Pallas,  Alcoa and AGL struck what was described as an "in principle" agreement on the price and terms covering the supply of electricity to the US multinational.

The power outage caused molten aluminium in more than 200 smelting pots to cool and solidify, costing the company about $1 million a day since. Hundreds of workers have taken unscheduled leave from the smelter over Christmas/New Year to ease the financial burden on their employer.

Governments are now likely to come under pressure around the transparency of the package.

Alcoa is Victoria's single biggest exporter and consumer of the state's electricity and uses about 10 to 15 per cent of its power.

The outage coincided with major financial challenges to Alcoa, including the conclusion of a generous contract struck with the Cain government 30 years ago, and the announcement of the closure of the Hazelwood power station in the Latrobe Valley, which is expected to lead to higher power prices.

In December, then industry minister Greg Hunt and his Victorian Labor counterpart, Wade Noonan, flew to New York to meet Alcoa global chief Roy Harvey over the future of the aluminium smelter.

The smelter directly employs about 660 full-time staff and contractors at Portland, a city of only 10,000. About 2000 spin-off jobs rely on the operation.

But it has been controversial since the 1970s, when the Hamer government opted to build it 500 kilometres from the state's electricity hub in the Latrobe Valley, and the Cain government struck a power contract that turned into an effective subsidy, costing Victorians billions of dollars.