More than $45 million has been promised by Victoria's state government to help solve the state's homelessness problem.
Victorian housing minister Martin Foley said the funding will include $19 million for outreach services and $13 million for an additional 106 units in the state.
Saturday's announcement comes after homelessness reached crisis point in Melbourne during 2017.
In September last year, the Melbourne City Council decided against new bylaws that banned rough sleeping in the city centre after months of heated debate.
It came after a large group of homeless people set up a makeshift camp along Flinders Street station in February.
Chief Commissioner Graham Ashton had claimed the homeless camp was a "very ugly sight", with the rough sleepers only there to "shake down" tourists on their way to the Australian Open tennis.
The Council to Homeless Persons welcomed Saturday's announcement, saying it was a "critical turning point" after the past year, when "demonising of the homeless (was) at an all-time high".
"This is the piece of the puzzle we've been calling for, for a long time. It puts a wedge in the revolving door between homelessness, prison and hospitals," CEO Jenny Smith said in a statement.
"Moving rough sleepers into a home is futile if they don't have the ongoing support they need to keep a home and stay on track."
She said helping rough sleepers is more productive than punishing them with fines and confiscating their belongings.
The plan includes six new outreach teams across metropolitan Melbourne and regional cities, and teams of mental health professionals, housing workers and nurses who will work closely with homeless people.
It also includes an extra $4.5 million for therapeutic services.
The Victorian Council of Social Services says the plan will help provide the "complete spectrum of wraparound services" that supports people to stay in housing.
"Each night, around 1100 people in Victoria are sleeping rough - and this number is growing," acting CEO Mary Sayers said in a statement.
"By getting to the bottom of what has caused someone to be at risk of or experiencing homelessness, we are better placed to ensure they can get their life back on track, and remain in their home for the long term."