Hundreds of workers on the $6.7 billion Melbourne tunnel project could be sacked amid landfill cost increases.

Companies CPB and John Holland have reportedly told the state government it would sack up to 600 workers over two months.

The Herald Sun reports the decision is linked to cost increases and a landfill levy for soil stored along parts the West Gate Freeway.

More than 100 staff may be stood down this week, it reported.

Toll giant Transurban, which is leading the construction of the West Gate Tunnel, told AAP there was a fixed price and time for the project.

“We are extremely disappointed the CPB John Holland Joint Venture is taking these steps when there are options to keep staff employed,” a statement on Tuesday says.

“While there are challenges on the project, there are plenty of pathways forward to progress works and we urge the CPB John Holland Joint Venture to keep these people in a job.”

The joint venture declined to comment.

It is understood that impacted workers will be offered relocation and, or redundancies.

This project has had a bumpy road with ongoing disputes between the government and the joint venture along the way.

The joint venture refused to provide comment.

Transurban has previously been warned by the state government it will lose millions of dollars each day the project is late.

The tunnel, which will be an alternative to the city’s heavily congested West Gate Bridge, was meant to be finished in 2022 but has been pushed back to 2023.