Victoria's Environment Protection Authority announced on Tuesday it had approved a revised plan for the Maddingley Brown Coal site at Bacchus Marsh to take on tunnel spoil.

It follows the Hi-Quality site at Bulla being given the tick of approval in March, while plans for a third landfill at Cleanaway Ravenhall remain under review.

Approvals for all three landfill sites were reversed late last year as the state's environmental regulator bowed to legal action launched by Bacchus Marsh Grammar school and the Moorabool Environment Group.

Tolling giant Transurban has since told investors the project won't be completed by 2023 due to the ongoing dispute over where to dump the contaminated soil.

The $6.7 billion tunnel, which will be an alternative to the city's heavily-congested West Gate Bridge, was originally scheduled to be completed in 2022.

But tunnelling was delayed in 2019 after soil contaminated with per- and polyfluoroalkyl substances (PFAS) - dangerous chemicals that have been widely used in firefighting foam - were discovered at the construction site.

Hundreds of workers on the project have lost their jobs because of the delay.

Transurban remains in a legal dispute with contractors CPB and John Holland, as well as the Victorian government over who should pay for additional costs on the delayed project.

Despite the latest approval, an EPA spokesman noted the West Gate Tunnel project would ultimately decide where the soil was dumped.

"The health of the local community and environment is EPA's highest priority. EPA will ensure a rigorous approach to compliance and all safety measures are followed," a statement said.

"EPA will continue to monitor the treatment and containment of this type of spoil to ensure that it meets critical public health and environmental standards to keep Victorians safe."

Australian Associated Press