A new plan will see teachers offered up to $50,000 to relocate from Melbourne to rural and regional schools.

The new incetnive is part of a $45.2 million package to help student results in regional areas match those in the city.

Teachers who keep working in the neediest schools will be eligible for an extra $9,000 a year, for three years.

“This is about attracting the best and incentivising them to stay,” Education Minister James Merlino said.

The state is struggling with a shortage of teachers as the population of school-aged students rises at a rate much higher than that of educators joining the workforce.

Australia's smartest young people are turning their backs on teaching, drawn instead to professions with better pay and more challenge.

Victorian Association of State Secondary Principals president Sue Bell says the funding may be a catalyst to change that trend.

“We have a decreasing number of people going into teacher training and at the other end, we have more people reaching retirement age … and so what we have is a looming shortage for secondary education for teachers,” she said.

The plan comes out of recommendations from the state's Expert Advisory Panel for Rural and Regional Students, which was set up to fid way to correct flagging results in regional schools.