Six mental health hubs across suburban Melbourne and regional Victoria will be operating by the end next year, the state government says.
Victoria's royal commission into its mental health system recommended the creation of between 50 and 60 community services for adults to get help closer to home.
Premier Daniel Andrews on Wednesday announced the government would set up six hubs across Frankston, Whittlesea, Brimbank, greater Geelong, the Latrobe Valley and Benalla.
The first of these was set to open from mid-next year and the rest would be up and running by the end of 2022, he said.
The royal commission on Tuesday concluded the state's mental health system was woefully inadequate and a catastrophic failure, operating largely in crisis mode and needed to be rebuilt.
Commission chair Penny Armytage was hopeful the findings would be a blueprint for reform across the country.
The premier also flagged the possibility of a partnership with the federal government to implement and pay for the reforms.
There are more than 65 recommendations, including repealing the current Mental Health Act and replacing it with a new one no later than mid-2022.
Under the changes, a Mental Health and Wellbeing Commission would be established and would include at least one commissioner who has lived with mental illness.
A new role as chief officer for mental health would also help oversee the overhaul of the system.
Regional services would be boosted with the creation of eight regional bodies to oversee services across different states, alongside dozens of local services.
The commission pointed to the need to boost the badly under-resourced mental health workforce.
TAFE is a state responsibility, but Mr Andrews called on his federal counterparts to make more university education available to get more people into the sector.
No dollar figure has been put on the total cost of reforming the system.
"Having just received the report, we're going to do lots and lots of work to work out exactly what can be achieved and over what timeline," Mr Andrews told reporters on Wednesday.
Ms Armytage found the mental health system had "catastrophically failed to live up to expectations and is woefully unprepared for current and future challenges".
"Despite the goodwill and hard work of many people, Victoria's mental health system has deteriorated for a multitude of reasons and over the course of many years," the report said.
"We heard from people and their families, at times in harrowing detail, about the impacts of being turned away from services at their darkest hour and the sometimes tragic consequences of this."
People had experienced enormous frustration and distress when trying to find the help they need, while a lack of resources meant many were turned away unless in absolute crisis.
There was an over-reliance on the use of hospitals, crisis services and medication, with the latter relied on as the main and sometimes only treatment.
Opposition Leader Michael O'Brien said any investment in mental health was a good start.
But he called on the government to move faster.
"Why is the government waiting years and years while the system's been deteriorating, getting worse to make some of these investments," he said.
Each year, one-in-five Victorians will experience mental illness. Last year the state recorded 698 deaths by suicide, more than triple the road toll.
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Australian Associated Press