Former AFL champion and premiership-winning coach Mark 'Bomber' Thompson has faced a Melbourne court charged with drug trafficking and possession.

The 54-year-old was arrested and charged almost five months after police executed a warrant at his Port Melbourne home.

The court heard that a range of drugs, including 134.6 grams of ecstasy, 33.1 grams of methyl amphetamine, an LSD tab, 5.6 grams of ephedrine and multiple Xanax tablets were found in a locked bedroom and loft study area inside the house.

A handwritten note referring to large sums of money was also found.

Police told the court forensic testing found Thompson's DNA on some of the drugs' packaging, which was found in a locked part of Thompson's bedroom which contained Geelong Cats memorabilia.

During the raid on Thompson's home, police seized four ice pipes, two sets of digital scales, eight hard drives and an iPhone.

Thompson was charged with two counts of trafficking ecstasy and trafficking methyl amphetamine.

He was also charged with possessing amphetamine, ecstasy and LSD, and possessing prescription drugs without a prescription.

Three others were charged in January following the police search on Thompson's property.

Mark Thompson left football in 2014 after coaching Essendon for one season. ( AAP: Joe Castro )

The former Geelong and Essendon coach appeared in the Melbourne Magistrates' Court and was granted bail on a $20,000 surety.

Thompson was asked to surrender his passport and cannot leave Australia.

He must also report to South Melbourne police station three times a week, and not consume any drugs of dependence or communicate with his alleged co-accused.

During the bail application hearing, which lasted over an hour, police prosecutors argued against granting him bail.

Detective Senior Constable Naomi Bourke told the court Thompson was a flight risk because he had access to large amounts of money and a yacht.

Thompson's lawyer, David Hallowes SC, argued that bail should be granted, emphasising Thompson's family ties to Melbourne.

Charges will be denied, Thompson's lawyer says

Thompson's lawyer said the charges would be vigorously denied.

As he left the court, Thompson would not comment on the charges.

"It's was a big day and hopefully we get our chance to fight them," he said.

Thompson played 202 games for the Bombers, captaining the club and winning three premierships.

He went on to win two flags as coach at Geelong in 2007 and 2009.

He returned to Essendon as an assistant under James Hird during the club's disastrous supplements program, which saw 34 players suspended by anti-doping authorities.

Thompson took over the senior role for one season in 2014 while Hird served an AFL-imposed ban for bringing the game into disrepute, and left the club at the end of that year.

He will return to court on May 25.