Power generator AGL and unions have given in-principle agreement to a landmark scheme that would see some Hazelwood workers transfer to AGL's Loy Yang facilities after their jobs at Hazelwood are lost.

But the deal hinges on the early retirement of some workers currently at Loy Yang. AGL owns Loy Yang A Power Station and Loy Yang coal mine.

Discussions with Hazelwood power station and mine owner Engie have not been so positive, with the state government expressing disappointment and frustration at its response to discussions about the future of workers.

Resources minister Wade Noonan said the government had urged Engie to adopt a "pooled redundancy" approach, where Hazelwood workers could move to Loy Yang B power station, which Engie owns, and maintain their service history and entitlements.

"At this stage they are not willing to commit. And that is disappointing because the state government is prepared to make a financial contribution," he said.

"I would have thought that in all of the discussions that we've had, months and months of discussions, that the generator that would have been signing up first essentially to a worker transfer scheme would have been Engie."

Mr Noonan said the government had had more positive discussions with Yallourn Power Station owners Energy Australia.

"It will really turn on whether workers at the other generators want to take an opportunity for an early retirement package," he said.

After meeting power industry workers Mr Noonan told The Age the scheme was not contingent upon the participation of all power industry generators, and negotiations would continue.

"Our resolve through all of this is to keep driving towards an outcome that would support Latrobe Valley energy and mining workers. I don't believe any issue that has been raised through the course of these discussions has been insurmountable," he said.

He also said that about 135 Engie employees would be retained at Hazelwood after it closed. A contractor workforce would also be retained

An Engie spokesman said the company continued to work closely with the Victorian government on the proposed transition of Hazelwood employees to other generators.

"There are a range of significant issues to be addressed if this proposal is to proceed and Engie in Australia is committed to working with agencies and other generators to ensure all aspects of the proposal are effectively addressed," he said.