Medical experts say government funding is urgently needed to address the spread of a flesh-eating ulcer in Victoria.

A flesh-eating bug is on the rise in regional Victoria and researchers don't know how it's spreading.

Experts are calling for urgent government funding so they can figure out how to contain the bacteria, which causes an infectious disease called Buruli ulcer.

Most commonly found in west or central Africa and usually associated with stagnant water, it can have devastating impacts on sufferers, including long-term disability and deformity.

Victoria is facing a worsening epidemic, with 182 new cases in 2016, 275 in 2017 and 30 so far in 2018.

The cases are also becoming more severe and occurring in new areas, but efforts to control the outbreak have been thwarted, because it's not known how humans are infected, a study published in the The Medical Journal of Australia on Monday says.

Native and domestic animals, including dogs, cats, possums and koalas, have all developed the disease, but it's unknown whether they spread it.

"As a community, we are facing a rapidly worsening epidemic of a severe disease without knowing how to prevent it," researchers said.

"The time to act is now, and we advocate for local, regional and national governments to urgently commit to funding the research needed to stop Buruli ulcer."

A spokesman for Victoria's Department of Health and Human Services says close to $800,000 has been made available for research over the past decade.

About $150,000 is also going toward current work on the disease, including analysis of possum faeces and testing of mosquitoes, which have been shown to contain the bacteria.

The department is also working with researchers on a national grant application to further investigate how to tackle the condition, the spokesman said.

"If the application is successful, the department will provide a cash contribution of $250,000 towards this research," he said in a statement.

Most cases in Victoria are occurring on the Mornington and Bellarine peninsulas.

The infection seems to happen more in warmer months and bites or trauma to the skin may play a role.

The ulcer can be treated with antibiotics, but patients end up paying about $14,000 each, because the drugs are not covered by the Pharmaceutical Benefits Scheme and many sufferers also require plastic surgery.