CULLED kangaroos in Horsham Rural City, Yarriambiack Shire and Northern Grampians Shire will be processed into pet food.
A two-year trial will begin on March 31 allowing Authority to Control Wildlife permit holders to take dead kangaroos off private land for commercial processing.
Agriculture Minister Peter Walsh said the trial would lift an existing ban on moving kangaroo carcasses from where they had been shot.
"Currently kangaroos culled under authorised control efforts cannot be used or processed commercially," he said.
"Landholders must bury the carcasses and, depending on the size of the control effort required, this can be laborious.
"Pet food processors have shown interest in making productive use of what is currently a wasted meat supply, and this would also help landowners with disposal."
Kangaroo Industry Association executive officer John Kelly said the change would provide an important service for farmers.
"It means that all the farmers out there will have a professional option for kangaroo control on their property," he said.
"They'll be able to get in professional harvesters to remove kangaroos."
He said the rule change did not go far enough and raised concerns about the lack of detail on the trial.
"We don't see why the use of kangaroo meat is limited to pet food; why not allow meat for human consumption?" he said.
Northern Grampians Shire Mayor Kevin Erwin said farmers throughout the shire would benefit.
"There are plenty of kangaroos around and certainly some farmers struggle with kangaroo populations," he said.
"If they can be put to some use that's probably a good thing."
But Wildlife Victoria and the Greens have opposed the move, arguing it will lead to increased numbers of kangaroos being killed indiscriminately.
Wildlife Victoria spokeswoman Amy Amato said the system would be flooded with new permit applications.
"There is no doubt that this change will lead to an increased number of kangaroos being killed," she said.
"It only needs an individual to deem that kangaroos are a nuisance to obtain a culling licence, so adding an economic value to the meat of a kangaroo will certainly see an increase in the number of kangaroos killed."
She said the current processes for culling kangaroos were inadequate and often led to animal cruelty.
"It's important to know that kangaroos are not harvested or farmed,'' she said.
"What actually happens is that mobs of roos are hunted and shot indiscriminately at night.
"The live pouch joeys of the shot females are removed and inhumanely killed and the other young still dependant on their mothers for milk are left to starve to death."
Other municipalities in the trial are Southern Grampians, Pyrenees and Ararat in western Victoria and Benalla, Mitchell, Murrindindi, Mansfield, Strathbogie and Wangaratta in the east of the