The irrigation settlement originally known as White Cliffs was established in 1909 by the State Rivers & Water Supply Commission of Victoria. Dairy allotments were 50 to 60 acres in size and linked to a square mile of dry land farm. In 1912, the area began changing to more suitable agriculture such as citrus and grapes. Also in that year the name was officially changed from White Cliffs to Merbein. In 1913, W.B. Chaffey established a winery, later known as Mildara Wines on the cliff-top. In 1917, the first allocation of 23 irrigation blocks were made in the Birdwoodton Soldier Settlement. An extension to the Merbein Irrigation District in 1918 saw an allocation of 36 blocks in Merbein West and in 1919 a second allocation of 51 blocks in Birdwoodton.