The Victorian government has revealed the number of new homes it is proposing to see built in each local government area across the state to reach its ambitious target of 2 million new dwellings by 2051. 

It follows the release of its housing statement in September last year, which aimed to increase housing stock to keep up with demands of the growing population while addressing affordability issues.  

"The data tells us that Melbourne and Victoria's population is going to grow and continue to grow significantly over the decades ahead," Premier Jacinta Allan said on Sunday. 

"We need to take a long term view for that long term change that is coming to our city and state."

According to the government, the targets had been set largely based on access to jobs, transport and services needed by Victorians.

Ms Allan said the aim of the targets were to "understand the space that needs to be created" and identify appropriate areas to cater for the new builds.

"Getting them built in the right places is so important," she said. 

"This is the start of the discussion with councils but also with local communities about how we can look at using every lever possible to build more homes."

Inner city suburb growth to ease the burden on outer suburbs

While houses will be built in each local government area across the state, the proposed targets vary.

The government said the figures were "tailored to suit the needs and the key local characteristics of each local council" while ensuring homes would be close to jobs, services and public transport.

Ms Allan said there were higher targets for some of the inner city council areas in a bid to ease pressure on the outer suburbs. 

"That growth in the outer suburbs is putting a lot of pressure, and if we allow that to continue  it will put too much pressure on those growth areas," she said.

"That's not sustainable."

The local government area of Melbourne would see a 122 per cent growth in housing, adding an additional 134,000 dwellings by 2051. Maribyrnong in the inner city would also substantially grow by 114 per cent. 

Just west of Melbourne, Melton has the proposed target of building an additional 132,000 homes, which would see a 190 per cent growth there. 

But the largest growth in stock would be seen in the Mitchell shire, in Melbourne's north.

The shire, which includes the suburbs of Beveridge, Broadford, Kilmore, Seymour, Tallarook, Pyalong and Wallan, would see a more than 300 per cent growth with a target of 68,000 homes to be built by 2051.

Infrastructure has previously been flagged as an issue for some outer suburban locations, but the premier said the government would support growth corridors and continue to fund schools, hospitals and roads to keep up with demand. 

Government hopes regional stock will support the economy 

Regional and rural areas will also see a significant boost to the number of dwellings.

Ms Allan said she hoped it would support regional economies by providing assurance to local building companies while addressing a worker accommodation shortage across some areas. 

"We know we need to support young families to be able to afford a home in our regional centres but we also know for regional businesses being able to find homes for their workers to live in is an economic constraint," Ms Allan said. 

In the proposal Greater Geelong would see the largest number of new homes built with the construction of an additional 139,800 dwellings by 2051, more than doubling its current stock. 

The figures are not locked but rather a guide, while the government works with local councils to determine if the figures are achievable.

It hopes to finalise the targets in coming months following consultation.