Dezi Freeman remains on the run after allegedly shooting two officers during a deadly confrontation at Porepunkah, about 300km northeast of Melbourne, on August 26.
There have been no official sightings of Freeman and police believe he might be receiving assistance from people within his network.
Victoria Police announced the $1 million reward on Saturday, noting the money would be paid for Freeman's arrest, rather than conviction as is usual practice for reward bounties.
Homicide Squad Detective Inspector Dean Thomas said the "life-changing" amount of money was the largest reward for an arrest in Victorian history.
"This figure recognises the seriousness of this violent offending and our commitment to locating Freeman as soon as possible so that he is no longer a risk to the broader community," he said.
"We believe this investigation will only be brought to resolution through assistance from members of the public ... this could be sightings of Freeman, information you're hearing in your local communities, even suspicious activity on your property."
The reward was announced a day after police farewelled a fallen comrade in a heartfelt funeral.
Thousands of mourners attended Senior Constable Vadim de Waart-Hottart's funeral on Friday at the Victoria Police Academy.
The 34-year-old was remembered as a smiling protector with an enduring fascination with Batman.
The slain policeman's mother and father, Carolina de Waart and Alain Hottart, travelled from Belgium for the solemn service, while his brother Sacha de Waart-Hottart delivered a teary eulogy.
He described his blue-eyed brother as a "ray of sunshine" who only ever wanted to make people happy and laugh.
"He was my very own superhero. He was my Batman," Mr de Waart-Hottart said.
The police air wing performed a flyover as more than 1000 officers lined the block for a long guard of honour for the hearse carrying his body, which will be cremated.
Leading Senior Constable Neal Thompson, 59, who was the second officer killed, will be laid to rest on Monday.
Police continue to search for the pair's alleged killer, with more than 100 properties in the alpine area scoured, although bad weather has hampered efforts.
More than 450 police each day are dedicated to the search.
The Australian military has been called in to help and is providing a planning specialist and air surveillance assets at the request of Victoria Police.
Police are not ruling out Freeman being assisted by a specific person given the tough terrain of the area he is in.
Chief Commissioner Mike Bush said on Thursday the police force remained focused on finding the accused murderer, declaring the matter "must be resolved".
Mr Bush said police had considered every investigative option to find Freeman.
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