Member for Charlton, Greg Combet, said he welcomed the federal government's investment of $3 million for the project.

"When I speak with homeowners and businesspeople, they tell me that graffiti is a problem in our area," Mr Combet said.

"I am pleased that the federal government can help tackle this problem using money confiscated from criminals."

Under this unique initiative, local councils can apply for grants between $50,000 and $150,000 to invest in measures including cleaning up graffiti; reducing graffiti (including improved lighting and CCT in graffiti hotspots); and preventing graffiti (including through education programs).

To be eligible for funding, councils must be working in partnership with a local community organisation which is incorporated and not for profit.

Such local organisations are invited to approach council with their graffiti-fighting ideas, Mr Combet said.

Applications for funding close on March 16.