But the push - underpinned by a landmark report by the Victorian Law Reform Commission - hinges on the agreement of the Turnbull government, which is a signatory to international rules covering the cultivation and manufacture of cannabis.

As revealed in The Age last month, a landmark study by the commission recommends a strictly controlled licensing scheme to produce medicinal cannabis, similar to the system for growing poppies.

Under the report's 42 recommendations - almost all of which will be adopted in full by the Andrews government - licensed cultivators and manufacturers will be able to produce a range of cannabis products, including oils, tinctures, capsules, sprays and vaporisable liquids.

These products will be sold at pharmacies, but only when authorised by a specialist doctor in a manner similar to the methadone program.

But the report stressed medical marijuana will not be legally available in a smokable form.

The commission's chairman, Philip Cummins, said the recommendations had been driven by compassion for those dealing with debilitating conditions who have no effective medical relief.

The government will begin a cultivation trial at a Victorian research facility. An independent medical advisory committee will also be set up to provide advice about expanding eligibility to further patient groups.

An office of Medicinal Cannabis will be established inside the Department of Health and Human Services to oversee the manufacture, dispensing and clinical aspects of the framework.

Premier Daniel Andrews said it was one of his proudest days in politics.

"I've seen first hand how medicinal cannabis can change people's lives," he said. "This landmark reform means Victorian families will no longer have to decide between breaking the law and watching their child suffer."

The report follows a pledge by Mr Andrews before the 2014 election to legalise medicinal cannabis, although he has stressed he does not support legalising marijuana for recreational use, or allowing it to be smoked to relieve medical conditions.

The decision also follows concerns about the quality of illegally-sourced medical cannabis oil.

Victoria is participating in a trial being undertaken in NSW. But specialist commissioner Ian Freckelton said the commission formed the view it was not appropriate to wait until the trial was completed.

"We were satisfied on the basis of those whom we met, many of whom had utilised medicinal cannabis to their advantage, and on the basis of research evidence, that it is an appropriate time for this modest step to be taken to alleviate suffering," he said.

Dr Freckelton also said the plan to cultivate medicinal cannabis in Victoria would need federal government support, although it will not require federal legislation.

"The Commonwealth is the signatory to an important international convention in relation to narcotic drugs and so it is fundamental that Australia, including Victoria, comply with its international obligations in that regard," Dr Freckelton said.

The commission has also flagged small changes to traffic laws to potentially allow people who have been legally prescribed medicinal cannabis to legally drive with the drug in their system.

The decision to introduce a cultivation scheme follows high profile campaigns by several Victorian families using cannabis oil to treat chronically ill children, often in cases where legal medicines have not worked.