The new model comes as a result of recommendations from the Royal Commissions into Institutional Responses to Child Sexual Abuse and is a state government directive.

Bishop of Sandhurst Shane Mackinlay said the new governance model would affect 56 schools in the Sandhurst Diocese.

Previously parishes would be responsible for the running of Catholic schools.

"Catholic Education Sandhurst will be incorporated to strengthen responsibilities for the diocesan governance and operation of Catholic schools, which have previously been operated by parishes," Bishop Mackinlay said.

"This is a fundamental change that affects 56 schools. It's big. It is setting up a diocesan company to be responsible for the 56 schools that operate in the diocese.

"Until now they have been operated by the parishes where they are located. They have been and will continue to be enormously part of the mission of those parishes and in every case there have been great, generous contributions and sacrifices by the parish community to keep schools operating."

Theplan to establish the new school governance model has been six months in the making and will be operational by January 1, 2021.

"The new model is critical to enhancing the governance processes and structures for Catholic Education," Bishop Mackinlay.

"With the widening responsibilities of our priests and the increasing demands of governance, it was imperative that we develop a new a model of governance for Sandhurst Catholic schools.

"In terms of timing, it was prompted by the Victorian government requirement that not-for-profit entities who operate with children incorporate in one way or another by the end of year.

"The insight from all sorts of royal commissions is that governance has been done badly whether (it's) aged-care, financial or the church (organisations). This state government requirement is a response to a royal commission (that we will be) consistent with and is one we support."

Bishop Mackinlay said the rest of the year will fine tune the setup of the company.

"By January 1 there will be a single company - Catholic Education Sandhurst Ltd - with a board of directors that will operate the schools," he said.

"I am confident that we have arrived at a governance model that will sustain and enrich the integral role of our Catholic education system in the life and ministry of our parishes for many years to come," Bishop Mackinlay said.

"Because the spiritual formation and educational achievement of each student is central to the life and spirit of our schools, the governance model focuses on students while providing robust structures for accountability, transparency and inclusivity."

The changes do not affect Marist College or Catherine McAuley College.