Minister for Local Government Jeanette Powell said the reforms would give the Local Government Inspectorate broader powers to examine serious misconduct of councillors and hand down stronger penalties.

The State Government will also create two new offences relating to breach of confidentiality and improper direction of council staff.

Rural Councils Victoria chairman and Hindmarsh Mayor Rob Gersch said he did not see a problem with the reforms.

"I don't see a big deal with them," he said.

"Unfortunately, there are one or two councillors or one or two councils that abuse the system.

"If a councillor misbehaves then I don't have a problem with the book being thrown at them."

Cr Gersch said Wimmera councillors knew to abide by the Victorian council code of conduct.

"There are rules in place and councillors know about the rules," he said.

Mrs Powell said the inspectorate would have the power to investigate alleged acts of serious misconduct by a councillor and to initiate prosecutions for both serious and gross misconduct.

The new offences relating to breach of confidentiality and improper direction of council staff carry penalties of up to $17,323.

"The overwhelming majority of councillors are decent, hardworking people who represent the best interests of their community," Mrs Powell said.

"These significant reforms reinforce that breaches of councillor conduct are serious and complement increased powers to be given to mayors to remove unruly councillors from council meetings."

Mrs Powell said the new legislation was due to be introduced into Parliament in the first half of this year.

She said the reforms were part of a suite of improvements to governance and conduct arrangements.

The State Government passed the Local Government Amendment Performance Reporting and Accountability Bill through Parliament on February 5.

Mrs Powell said the new legislation which comes into effect on April 18 would provide Victorians with an unprecedented level of transparency and accountability across local government.

"Victoria's new Local Government Performance Reporting Framework will be crucial in ensuring the proper use of public money and the provision of high-quality services for residents and ratepayers," she said.

"The new framework will reveal where councils are performing well, where they can improve and whether the community is getting value for money."