Victoria's 16,000 operational police and Protective Service Officers will be authorised to immediately use deadly force when faced with potential terror attacks.

Under the new method the first officers on a scene may be required to take immediate action, including shooting suspects, if there is no time to wait for support.

Police subdue the suspect at Flinders Street on Grand Final Day Credit:Fabian Wright

Police acknowledge that in likely terror attacks the plan will be to reduce the number of casualties rather than engineer a peaceful resolution.

Officers will be retrained following a three-year review that analysed international terror ambushes and local events including the January's Bourke Street Mall attack that left six people dead and Sydney's 2014 Lindt Cafe siege. The review found present police training was inadequate in the face of the latest threats.