Under the shake-up, to be announced today by the Attorney-General Rob Hulls, traditional owners will be able to negotiate directly with the state without having to pursue onerous native title cases in the Federal Court.

Aboriginal groups will be able to forge agreements with the State Government to manage or jointly manage Crown land - including national parks - and access land for hunting and camping without a permit.

Traditional owners could be compensated for activities including mining, carbon capture and storage as a result of reforestation and the maintenance of wetlands under land-use agreements. Disputes over land use would be adjudicated by the state's planning tribunal.

Mr Hulls said the new system would save taxpayers money, provide certainty for all groups, including industry, and lead to land claims being resolved much faster.

"This is a landmark day, not only for Victoria but for Australia, as this state becomes the first to negotiate with traditional owners an alternative pathway for resolving native title claims," Mr Hulls said.

Under the current system, the only way for Aboriginal groups to make native title claims is through the Federal Court.

The Australian of the Year, Mick Dodson - who chaired a committee which developed the reforms - said that last year Victoria had the worst record of any state or territory when it came to returning land.

There are now 15 native title claims in Victoria, most of which were lodged up to 10 years ago but are unresolved.

"The way we've been going, it would take a further 55 years to resolve the current claims," Mr Hulls said.

"We think there is a real opportunity for us to resolve 10 settlements in 10 years, which would see the current claims lodged in the courts, withdrawn and over 90 per cent of the state resolved."

Owners who can demonstrate a traditional - rather than continuous - connection to land will be able to forge agreements with the State Government.