From 1944, a Division of State Development was established in the Department of the Premier to oversee development and decentralisation in Victoria. It had been agreed with the Commonwealth Government that this would be done on a regional basis. The Latrobe Valley Development Advisory Committee was, with the Central Planning Authority and other major committees, one of those committees charged with investigating development in a consultative fashion and making recommendations to the Government about the course it should take and the measures necessary to bring it about.

The Committee was concerned with assessing the needs and advising the Government regarding the development of the Latrobe Valley. This included the development of the brown coal resources and other related economic developments as well as the needs for social infrastructure.

The reporting relationships of the Committee are not entirely clear. It may be that, like the regional committees it reported to the Central Planning Authority, but it may also have been independent of that body and an equally ranked subordinate agency of the Division of State Development.