Victoria Police's recruitment of a gangland lawyer to report on her clients will be scrutinised by a $7.5 million royal commission.
The convictions of big-name crooks including drug lord Tony Mokbel are under a cloud after Monday's revelations of the informant's work between 2005 and 2009.
Premier Daniel Andrews was quick to reassure confidence in the state's police force.
"There are some very serious issues as they relate to the management of informants, or shall I say the mismanagement of informants, and potential impacts upon the safety or the integrity of criminal convictions," Mr Andrews told reporters.
Cabinet approved the establishment of the royal commission on Monday at its first meeting since Labor's re-election.
Work will start on establishing the royal commission in coming weeks, including appointing one or two commissioners who will help determine the terms of reference.
The inquiry will start in early next year, probably with both public and private hearings.
The number of convictions impacted will be established by July, with a mid-year interim report and the commission's work will be completed by December, Mr Andrews said.
"I'm not particularly impressed to have to deal with these issues, they are significant issues, but they need to be dealt with properly," the premier added.
"It's not just about getting angry, you've got to get this right.
"How on Earth did it happen and what do we have to do to make sure that it can never happen again? That's what the royal commission process is all about."
Mr Andrews said he could not say whether the premier, attorney-general or minister at the time would have known about the informant, but said it was "highly unlikely".
"These are not matters that the premier in my judgment would be briefed on or indeed a minister ... they're very much of an operational nature," he said.
He also did not think current Chief Commissioner Graham Ashton was involved in the handling of the informant.
Mr Ashton subsequently noted news of the royal commission and said there had been many changes to police processes since the lawyer acted as an informant.
Victoria Police will establish Taskforce Landow to look at any issues relevant to Monday's informant revelations.
Mr Andrews said the informant inquiry did not impact on his election promise of a mental health royal commission, which will still go ahead.
– Australian Associated Press