Decades-old bus contracts are holding back the ability to run more services in Melbourne and revamp the declining network, so the system will be overhauled, the Victorian Government says.

What has the Government promised? More frequent services, better timetables

More frequent services, better timetables Adjusted and new routes to be introduced

Adjusted and new routes to be introduced Trials of innovations like electric buses, bike racks

Public transport bus service contracts will expire next year and the Andrews Government has decided to open up 12 of the 13 contracts.

Many of the contracts have been held by the same private operators for decades.

Minister for Public Transport Jacinta Allan said the current arrangement had been restricting Public Transport Victoria's ability to overhaul the system, which has been declining in usage over the past three years.

She said the primary purpose for the changes was to create better services across metropolitan Melbourne.

"We have to step through this carefully because some [services] have been in place for a very long time, and those operators provide a really valuable service to those communities," she told ABC Radio Melbourne.

"Other have grown as Melbourne has grown and indeed for some communities, they do not have adequate bus coverage at all.

"We all want to provide more bus services. The challenge we've got is the contracts, some of which date back decades, are really holding us back."

Bike racks on buses, electric services flagged

Ms Allan said the Government planned to work with the industry to make improvements, and would not necessarily change the operators.

Melbourne's bus network: Carried 122.5 million passengers last financial year

Carried 122.5 million passengers last financial year Travelled 113.3 million kilometres

Travelled 113.3 million kilometres Met punctuality targets 78.8 per cent of the time

Met punctuality targets 78.8 per cent of the time Serviced 18,296 metropolitan bus stops Source: Public Transport Victoria

"It's about looking at how we can improve the timetable, look at how we can extend bus services with new routes or adjusted routes," Ms Allan said.

She said the Government would look at how to introduce smaller, more frequent and possibly electric buses.

"The current arrangements don't give us the flexibility to jump on those innovations," she said.

"Another great example is there's a trial in Moreland and Bendigo of bike racks on buses."

Current bus routes 'like spaghetti'

The Public Transport Users Association welcomed the plan, saying Melbourne's buses were too infrequent.

Spokesman Daniel Bowen likened current routes to spaghetti.

"They do need reform and if the current contracts are a barrier to that then it does make sense to reform them," he said.

"Buses need to run more like trams. They need to run direct routes, frequent all day including weekend and evenings."

On ABC Melbourne's Facebook page, many people said the shunned bus services because they were slow, often late and infrequent.

One woman wrote: "In our area, buses only run every one to two hours and the stops are not close enough - if I have to drive to a bus stop, I may as well drive to my destination!"

Many others agreed, complaining the timetables with connecting services did not match up.

"When I didn't have a car a couple of weeks ago I was going to use bus services to get my kids from school," another woman said.

"Problem is not one ran directly near the school to my place so I would've needed two services. Getting home 1.5 hours after school finished!"

Ms Allan said there would also be community consultation about the best routes to keep or introduce.

"Some people love the bus stop at their door, others don't, some want to see the bus going down their street and others don't, so that all has to be part of that next wave [of negotiations]," she said.