The Victorian government will spend another $22 million on mental health, including establishing pop-up clinics across the state.
More than $13 million will be spent on establishing 20 temporary mental health centres across Melbourne and regional Victoria, with 90 dedicated clinicians.
Money will also go to parenting programs for children experiencing anxiety, as well as to Indigenous organisations.
"Some Victorians have been really struggling, whether that's through isolation, financial stress, illness and indeed loss of life or loss of a loved one," Mental Health Minister James Merlino told reporters on Tuesday.
He said more young people suffering from eating disorders, suicidal ideation, and self-harm have been arriving in hospital emergency departments.
"We know that the pandemic has had an impact, on top of what was already a broken mental health system," Mr Merlino said.
The director of the Orygen youth mental health service Professor Patrick McGorry welcomed the funding, but told the news conference the mental health system had been overwhelmed for years.
"The issues that people are raising about hospitals being overwhelmed with COVID cases, that's our daily life in mental health, it always had been," he said.
He said young people with life-threatening mental health conditions are being turned away from hospital emergency departments on a daily basis, in a mental health "shadow pandemic".
In February, the final report by the royal commission into the state's mental health system found there were critical shortages in the sector, and made 65 recommendations.
The last state budget included $3.8 billion in mental health funding.
Meanwhile, data from the state's Coroners Court shows there have been fewer suicides in Victoria compared with this time last year.
The figures show 439 people died by suicide from the start of 2021 until August 31, a reduction from the same period in 2020, when the toll was 493.
However, there has been a slight increase in suicides in young women, with eight people aged under 18 taking their own lives.
The report cautions there may be short-term fluctuations in the data, which tend to even out over time.
The figure for this year includes 335 men and 104 women.
The Coroners Court investigates all suspected suicide deaths and releases figures each month to raise awareness.
Lifeline 13 11 14
beyondblue 1300 22 4636
Lifeline 13 11 14
Kids Helpline 1800 55 1800 (for people aged 5 to 25)
Australian Associated Press