It would mean no more burning coal for power in the Latrobe Valley and a big shift in how business operates and people run their homes.

Meeting the target – which Mr Andrews promised standing alongside dozens of children from Mill Park Heights Primary - would require a dramatic escalation in clean electricity generation and a transformation in Victoria's homes to make them more efficient including, for example, widespread use of solar panels linked to at-home battery storage.

Mr Andrews announced the target as part of changes to the state's Climate Change Act, following a review handed down earlier this year.

Asked if State Treasury had modelled the impact on the economy of meeting the net zero target, Mr Andrews said there were costs involved whenever government supported new industries and tried to deal with a problem, but the cost of doing nothing would be "much, much bigger".

"If we don't pledge to play our part then in five or 10 or 20 years we won't talk about extreme weather events, It'll just be the weather," he said.

The government will legislate rolling five-year interim emissions targets, and give itself the power to direct the Environment Protection Authority to limit industrial greenhouse gas emissions if it chooses.

But the pledge was not accompanied by new policies designed to meet it, and the government says it will encourage businesses to act, not impose penalties. There will be no state emissions trading scheme or carbon tax.

Later this year, the government promises a target for 2020 for its departments and agencies, including schools and hospitals. It will ask businesses to pledge voluntary targets. State targets for 2025 and 2030 will be announced before the next state election.

Australian Industry Group Victorian head Tim Piper said he was relieved the government had opted for a voluntary rather than mandatory approach for businesses.

"We can't have a position where companies are disadvantaged and have to act in a way that might cause them to be less competitive than interstate neighbours," Mr Piper said.

A state renewable energy plan is expected shortly. The government last year set an initial target of at least 20 per cent renewable energy by 2020. Victoria currently gets about 12 per cent of its electricity from clean sources.

Mr Andrews said Victoria's energy mix had already changed towards renewable energy, declaring it was "back in business" under his government.

The area hardest hit over coming decades would be the Latrobe Valley – home to Victoria's four large brown coal power plants. The Hazelwood brown coal plant is already under a cloud, with its majority French admitting it is considering the generator's future as the company looks to exit coal across the globe.

The valley is likely to require government intervention to develop new industries and help for the thousands employed in the coal industry. The government promised $40 million for the transition away from coal in this year's budget, but has not said how that would be spent.

Environment Victoria chief executive Mark Wakeham welcomed the government's pledge to strengthen the Climate Change Act, but urged it to act quickly on emissions.

"The road-toll aim is to reach zero. Targets for climate pollution are now the same. The sooner we get there, the better, and the more damage we can avoid," he said.

The Climate Change Act was introduced by the Brumby Labor government before the 2010 election, and included a target of a 20 per cent cut in emissions below 2000 levels by 2020. The Baillieu Coalition government amended the act to remove the target, saying it supported a national target. Six years on from the act coming in, Victoria's emissions remain slightly higher than 2000 levels.

The Andrews government supported or supported in principle 32 out of 33 recommendations in the review of the act, led by Martijn Wilder, of law firm Baker & McKenzie.

It rejected a recommendation that it consider introducing an independent review process of whether government decisions were consistent with its climate policies, saying it could achieve the same outcome by taking expert advice before decisions were made.