Victorian local governments are up in arms over a Dan Andrews decision to give sweeping powers to Aboriginal land councils.

The proposal, signed between the State Labor Government and Barengi Gadjin Land Council gives Aboriginal groups the power to name and rename major landmarks.

It also recommends that local governments prefer Aboriginal businesses when awarding contracts and Aboriginal workers when employing staff.

Councils only became aware of the deal one month ago, after it had been signed, and have complained that they were not included in the negotiation process.

The agreement covers 10 council areas spanning almost 35,859sq km in Victoria's northwest including Mildura, West Wimmera, Buloke, Pyrenees, Hindmarsh, Northern Grampians, South Grampians, Horsham, Ararat and Yarriambiack.

It was signed off in October but only made public on the state government's website two weeks ago.

The agreement advertises itself as “a significant and respectful further step towards redressing the devastation and destruction that was brought about by the unjust dispossession of our family, country and lifeblood by the colonising Europeans”.

It comprises 39 “proposed actions” including that councils be required to seek advice from local Aboriginal groups about the naming of roads, bridges and public spaces. The document also specifies that ratepayers should pay Indigenous groups for this advice.

Local mayors insist the Andrews government did not consult with them and are worried not only about the costs recommended but about whether the recommendations are actually requirements.

West Wimmera mayor Tim Meyer said the agreement was “very one-sided” but feared speaking against it would be construed as racism.

“The agreement, I don't want to sound racist here but it's very one-sided – there's a lot in the agreement about needing to offer them employment and tenders on some of our roadworks, which is outside the Local Government Act procurement policies,” he said.