Fraccing and other unconventional development like CSG remain banned.
Two bills were introduced to the state's lower house in March last year.
One to formally end the moratorium, albeit a year after it was due to come off, and the other to ban fraccing permanently.
It was a surprising move from a premier who expanded onshore exploration bans and has pushed hard on a renewable agenda but Dan Andrews said then he was following the science and looking to an "orderly restart" of exploration after three years of investigation by the Victorian Gas Program.
The results concluded conventional exploration will not "compromise the state's environmental and agricultural credentials".
The study found the state could enjoy a $310 million windfall "for regional economies" and create 6400 jobs.
The government said gas "will continue to play an important role in supporting Victoria's transition to a cleaner energy future".
Forecasts suggest a steep decline from offshore Bass Strait assets despite the Gippsland Basin Joint Venture's West Barracouta recently starting up.
Analysts are in consensus that while helpful, Victoria's conventional onshore resources are likely not large enough, or able to be developed in time, to meet projected shortfalls, which could arrive in as little as two to three years.
EnergyQuest CEO Dr Graeme Bethune wrote in a report two years ago that five Victorian councils were petitioning the state government for a lift of the moratorium, with those in the west looking over the border to South Australia's share of the onshore Otway Basin and its recent prospectivity.
Corangamite, close to the South Australian border, sees value in the area since Beach Energy's good work proving up the Penola Trough in SA a couple of years previously.
Lakes Oil famously took the state government to court under its previous management, losing a multibillion-dollar case, but still planning a restart when time allows. The Wombat project is development ready, it has said, though it is currently busy working on the 90% CO2 well it shares with Vintage Energy, also in South Australia.
Lakes is backed by Hancock Prospecting subsidiary Dark Horse Resources.
"Victoria has abundant local onshore resources but for years has rather imported gas from other states. Incredibly, it has even considered importing it from overseas with the planned import terminal," APPEA Victoria director Ashley Wells said on Thursday.
"Now that the ban is lifted, the industry can resume the exploration and development of local gas resources - and it is a given that we must at all times meet the highest environmental and operating standards at all times."
