A new Victorian mental health and wellbeing act will be introduced to parliament as the state government invests $200 million to improve support in schools.

The bill, to be introduced on Tuesday, will replace the Mental Health Act 2014 and ensure people seeking care are more involved in decisions about their treatment and support.

Victoria's treaty process will also be recognised and acknowledged in the new act.

Meanwhile, the state government has announced $200 million to expand the state's Mental Health in Primary School program.

The funding will ensure mental health and wellbeing leaders are in every government and low-fee non-government primary school by 2026, Education Minister James Merlino said.

"We know that more than half of all mental health illnesses manifest by the age of 14. Imagine if we can identify and intervene early in grade two, three, four, five and six," he told reporters.

The Royal Commission into Victoria's Mental Health System recommended the government expand the school pilot, which is already under way in 100 schools.

Orygen Youth Health executive director Patrick McGorry said the pandemic and lockdowns exacerbated mental health concerns for Victorian children.

"We all know that young people have done it very tough during COVID," Prof McGorry said, noting there had been a 25 per cent increase in the need for care.