A truth and justice commission has been a long time coming, Dja Dja Wurrung and Yorta Yorta man Trent Nelson said.
Mr Nelson, a member of the First Peoples' Assembly of Victoria, said the Yoo-rrook Justice Commission would be an opportunity to really delve into the issues affecting Aboriginal Victorians.
He hoped the commission would help right the wrongs of the past and make recommendations for healing, so Aboriginal people could move forward.
The process would provide opportunities to acknowledge the sadness of the past and share the stories of Aboriginal Victorians - something Mr Nelson believed would be particularly important with respect to elders.
"A lot of elders are still living through intergenerational trauma with their families," he said.
He believed it was important to acknowledge the experiences of elders and share their truths, as well as working to bridge the educational gap for non-Aboriginal Victorians.
The First Peoples' Assembly had been working toward the establishment of such a commission, Mr Nelson said.
He believed the commission was a really big step forward for reconciliation and the acknowledgement of Aboriginal people.
"I'm really positive about it happening," Mr Nelson said.
"It's been a long time coming."
Indigenous leaders have described the establishment of a truth and justice commission as a step towards healing.
The state government announced the Yoo-rrook Justice Commission will be set up as part of the treaty process already underway.
It will make Victoria the first state in Australia to set up a 'truth-telling forum' of this type.
There will be five commissioners, and a majority of those people will be Indigenous. An interim report is due in 2021.
"You can't have justice without truth," Taungurung man and First Peoples' Assembly co-chair Marcus Stewart told reporters on Tuesday morning.
"Today marks a significant step forward, where our community, as of today, start the process towards healing."
Mr Stewart said the announcement came after decades of activism by Indigenous leaders.
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