Almost 700 koalas have been culled in the Cape Otway area of western Victoria because of "overpopulation issues", according to the state's Environment Minister.

The secret cull was done under the previous Liberal government in 2013 and 2014 near the Great Ocean Road.

The koalas were captured and sedated before being put down by wildlife officials.

Environment Minister Lisa Neville called it "a very challenging and complex issue" and said any means to address it must be both "humane and effective".

The Minister said she was seeking advice from experts and a special koala management program would be put in place.

"It is clear it's an overpopulation issue and it is clear that we have had koalas suffer in that Cape Otway area because of ill health and starvation," she said.

"That's just not good enough and that's a terrible way to treat koalas.

"I'm wanting to make sure that we're taking the best action we can in this terrible situation of overpopulation.

"I don't want to see koalas suffer."

Ms Neville promised to be "transparent" with the Victorian community about any action taken to deal with the problem in future.

"Experience suggests that moving these koalas does not work and that can in fact cause even greater suffering," Ms Neville said.

Despite the cull, overpopulation remains a problem in the area.

"[The number] continues to increase and that's why we need to have a look at a koala management strategy to see whether we can reduce that population growth which continues at a very fast pace," she said.

"In this case it is about how we treat and care for koalas which are clearly loved by many Victorians and many people across the world.

"We need to stop their suffering. Our priority must be about treating these koalas humanely."

'The whole of the cape smelled of dead koalas'

Frank Fotinas runs the Bimbi Park Caravan Park at Cape Otway, which promotes camping under koalas.

While they are good for business, Mr Fotinas said the koalas were stripping the trees, leaving acres and acres of dead wood.

"Koalas are great for business but if there's no trees, there's no koalas," he said.

He said the animals were not culled, they were euthanased because they were starving to death and many more died of natural causes.

"A lot more were dying naturally than were euthanased," he said.

"The whole of the cape smelled of dead koalas. It smelled like death.

"You should come and look at the trees. There are hundreds of acres of dead trees."

Mr Fotinas said locals had planted 70,000 banded trees to keep the koalas away and the situation was better than a couple of years ago.

"We just need to constantly remind people about it," he said.

"We need more government intervention. We need DEPI [the Department of Environment and Primary Industries] here."