Victoria Police will get clearer shoot-to-kill powers during life-threatening situations and be able to hold suspected terrorists for up to four days without court permission.
The moves are a part of sweeping reforms based on 16 recommendations from a report commissioned after the deadly Brighton siege in June.
Yacqub Khayre (YAH-koob KY-ree) shot serviced apartment receptionist Nick Hao dead and wounded three police officers before being cut down in a hail of bullets.
Victorian Minister for Police Lisa Neville says authorities need to ensure that when police are in a life or death terrorist situation, they know they can use lethal force if required, without hesitation.
The state's Premier Daniel Andrews says the new powers will help keep Victorians safe.
The recommendations will be discussed at the upcoming Council of Australian Governments (COAG)meeting in October, with the Government expecting to introduce legislation into Parliament in early 2018.
