The bill before the Upper House will set up a new port authority charged with creating Victoria's second container port.
The bill recently passed the Lower House with the support of the major parties.
Simon Branigan from the Victorian National Parks Association says an increase in ships moving through Western Port will harm the precious coastal environment.
"Western Port Bay has internationally recognised wetlands under the Ramsar Convention," he said.
"These wetland are very important breeding habitats for a number of fish species and also roosting habitats for a number of bird species."
He says there will need to be extensive dredging in Western Port which will put seagrass habitats at risk.