Local councillors could be suspended for six months if they are found guilty of misconduct under new laws to be introduced to Victoria's Parliament to root out "bad apples".

The State Government is expected to put forward the reforms next month, which would also allow it to stand aside a councillor while they are under investigation by an independent panel.

Local Government Minister Natalie Hutchins said the changes would allow the Government to deal with rogue councillors more effectively.

"Unfortunately the system has been a little bit broken when it comes to councils being able to deal with the misconduct of wayward councillors," she said.

"In Victoria we have over 600 councillors and occasionally we have one that doesn't always act by the code of conduct of that council, and sometimes that can really affect the reputation of that council.

"We want to make sure there's better procedures in place to deal with any breaches quickly and effectively.

"If those are not able to be dealt with within the council, we're looking at tougher penalties with the code of conduct panels being able to suspend councillors for up to six months in serious misconduct situations."

Ms Hutchins said there had been instances of councillors leaking confidential information or making racist comments using the council's name.

"The State Government doesn't have any power to stand down or penalise an individual councillor, in fact the act only provides for the State Government to be able to intervene by dismissing the entire council and I don't think that that is fair at all," she said.

Ms Hutchins said that under existing laws, the Government was only able to sack an entire council when there were ongoing problems.

"If there's one bad apple in a very rare case that is damaging the reputation of the council, we should be dealing with that problem and supporting the rest of the council," she said.

"This is about ensuring high level standards of governance across all levels of government."