The Federal Government has announced a compensation scheme for victims of institutional child sexual abuse.

The Commonwealth will lead the program, while states, territories and institutions, including churches, will be able to opt in.

Victims will be able to access up to $150,000 each.

The cost for just the Commonwealth over the 10-year period was estimated to be between $570 million and $770 million.

Social Services Minister Christian Porter told reporters in Perth that the scheme would run for 10 years with an option to extend.

He said an advisory council would be established to help oversee its delivery.

"A fair simple and generous process for redress is the most significant thing that we can do for survivors of sexual abuse," he said.

"The central thing that we are trying to avoid in all of this is to re-traumatise victims."

He also said the scheme would be well publicised to ensure those who were eligible for funding did not miss out.

Mixed response from states, territories

Mr Porter said the Commonwealth could not compel states to join the scheme, and there had been a mixed response from the states and territories.

"In a perfect world it would be nice to announce the simultaneous opt-in of those jurisdictions here today," Mr Porter said.

"We've been unable to do that.

"The view that we've now taken is that the way in which we will encourage that opt in is to be clear and transparent about the best practice nature of the scheme."

He said in the case of the territories, the Commonwealth reserved the right to legislate to compel them to join if they did not opt in voluntarily.

Support groups welcome scheme

The co-founder of support group Care Leavers Australasia Network, Leonie Sheedy, said the scheme was a "wonderful first step".

"We wanted a national redress and we didn't want to go back to the abusers, the state governments or the churches and charities," she said.

"But there's an awful lot to be worked out yet."

She said there should also be penalties introduced for institutions that decided not to opt in for the scheme.

The Catholic Church's Truth, Justice and Healing Council CEO, Francis Sullivan, said religious leaders had made it clear they wanted a national scheme run by the Commonwealth.

"This is a great day, this is an important day," he said.

"This scheme is affordable for every government and institution.

"This isn't about money, this is about recognition of those who have suffered."

In August last year, the Royal Commission into Institutional Child Sexual Abuse released a report outlining 99 recommendations to deal with the ongoing care of victims.

At its heart was the idea of a $4 billion national redress scheme, which would offer compensation, counselling and psychological care, and a response from the institution if requested.

The commission proposed the redress would be funded by the institutions where the abuse occurred, or by governments if the abuse happened in a state-run facility or where a non-government institution no longer exists.