Bevan Warner,the chief executive of homelessness organisation Launch Housing,said the"very positive"package demonstrated that homelessness was solvable.

"We can end homelessness,but not without more homes and more support. This announcement provides both,"he said.

"We now need to get the federal government to take the expert economic advice and to turbocharge the recovery with more social housing,so the homes get built to avoid future instances of homelessness."

The Council to Homeless Persons said the funding would make an"enormous difference".

"Around 2000 people are currently in hotels,including over 220 children,over 500 women and more than 1100 single households,"the council said.

"With the lockdown increasing levels of family violence and resulting in job losses,more people are coming to homeless services needing accommodation."

The council said there was a need for permanent housing for people who could not pay rent in the private market when subsidies ran out.

Social housing makes up only about 3.2 per cent of all housing in the state,well below the national average of 4.5 per cent.

In May the Victorian government announced a $500 million package to build 168 new social housing units and upgrade 23,000 run-down units.