Premier Daniel Andrews has committed to implementing all 65 recommendations from the state's royal commission into mental health.
Mr Andrews said Victoria's mental health system is "more than cracked, it is completely broken".
"We have a once in a generation opportunity to set right those many wrongs and to rebuild our mental health system from the ground up," Mr Andrews said.
"It won't be simple, it won't be fast and it won't be easy.
"Without real, concrete and committed action from government, nothing will ever change.
"As a government, we recognise these profound failures and commit ourselves to implementing every single one of the commission's recommendations."
Opposition leader Michael O'Brien said the royal commission highlights how broken the state's mental health system is.
"This royal commission report must be the start of fundamental change," Mr O'Brien said.
"Mental health care is an essential service of government and must be prioritised as such.
"It is a core responsibility of government and should be resourced as schools and police are.
The commission's final report, tabled in parliament on Tuesday, delivered 65 recommendations, including a proposal to establish eight interim regional bodies to plan, fund, develop and coordinate mental health and wellbeing services has been recommended by the state's royal commission into mental health.
The report recommended the interim regional bodies be replaced with legislated Regional Mental Health and Wellbeing Boards by no later than the end of 2023.
"The boards would lead engagement with their respective communities and undertake workforce, service and capital planning for mental health and wellbeing services," the report said.
Supporting social and emotional wellbeing in schools was highlighted by the commission, which recommended the government develop a fund to support anti-stigma and anti-bullying programs to support students' mental health and wellbeing, prioritising rural and regional areas.
The trial of two new digital service delivery initiatives and bolstering the mental health workforce were outlined as part of the report's specific recommendations for rural and regional areas.
Victoria's mental health system cannot meet the needs of the people it's designed to support and a complete rebuild is necessary, a royal commission says.
The creation of a new Mental Health Act and a new authority to hold the government to account are among dozens of recommendations to reform the system.
The royal commission's final report tabled in parliament on Tuesday calls for Victoria's existing Mental Health Act to be replaced by no later than mid-2022.
This body would also investigate complaints about mental health services and make recommendations to the premier.
Other recommendations include the creation of a chief officer for mental health and the creation of between 50 and 60 local adult mental health services, to ensure people can get treatment close to home.
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"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 royal commission's final report says.
People had experienced enormous frustration and distress trying to identify the right mental health services for themselves or someone else.
A lack of resources had forced mental health services to raise their thresholds about who they could see, meaning many people were turned away unless they were in absolute crisis.
The commission's recommendations - 65 unveiled on Tuesday on top of the nine previously canvassed in its 2019 interim report - include a review of mental health laws five-to-seven years after the new act is introduced.
Separate from an ongoing mental health commission, the report calls for a new non-government agency to develop and deliver services and training.
A statewide trauma service for people living with mental illness and substance abuse or addiction was also recommended.
Gender-based violence in mental health facilities needs addressing, the report adds, alongside housing.
The government has been asked to allocate 2000 dwellings from its housing build to people requiring intensive treatment and support.
As well as this, the report says there should be a further 500 supported housing places for young people between the ages of 18 and 25 with mental illness and who are at risk of homelessness.
Each year, one-in-five Victorians will experience mental illness, and nearly half the state's population will experience it during their lifetime.
More than 200,000 Victorians will meet the criteria for severe mental illness such as schizophrenia or bipolar disorder.
In 2019-20, 95,400 people who needed specialist mental health services were unable to access them, via either the public or private system.
In 2020, the state recorded 698 deaths by suicide.
Premier Daniel Andrews said his government recognised the profound failures of the current system and was committing to implementing all of the commission's recommendations.
If you or a loved one need support, contact Lifeline on 13 11 14 or Beyond Blue on 1300 224 636.
If you are looking for a mental health service, visit betterhealth.vic.gov.au
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