Victoria's new $2 billion research fund will partner with private investors to encourage the manufacture of new inventions in the state.
"This is unique in our country," the Premier Daniel Andrews said.
"We'll finish up with so many products, so many different ideas that can be taken to market, and not manufactured in another country," he said on Wednesday.
The "Breakthrough Victoria" fund, outlined in Tuesday's budget, will provide $2 billion for research over the next decade.
The fund will focus on sectors such as health, advanced manufacturing, and clean energy.
Innovation Minister Jaala Pulford says the fund is expected to create more than 15,700 jobs.
"We'll be drawing on the very brightest minds in Victoria, to focus our efforts here," she said.
The governance arrangements for the fund are still being worked out, but private investors and philanthropists are expected to play a part.
The fund may also have its own equity stake in the innovations where it decides to invest.
More than 40 per cent of Australia's biotech and medical technology industry is based in Melbourne.
