The Australian Greens are proposing to decriminalise cannabis, declaring the war on drugs has failed.

Greens leader Richard Di Natale said the country's approach to illicit drugs was an "unmitigated disaster" and it was time for real reform.

"Governments around the world are realising that prohibition of cannabis causes more harm than it prevents," Senator Di Natale said.

Greens leader Richard Di Natale said the country's approach to illicit drugs was an "unmitigated disaster" and it was time for real reform. (AAP) (Supplied)

"It's time Australia joined them and legalised cannabis for adult use."

The minor party wants to redefine cannabis as a legal substance, with licences issued for its production and sale.

A national agency would be established to issue licences, monitor and enforce conditions and oversee regulations.

Up to six plants could be grown for personal use and strict penalties would be imposed on selling cannabis to minors or without a licence.

Senator Di Natale pointed to a recent poll showing 55 percent of Australians believed cannabis should be regulated and taxed like alcohol or tobacco. (AAP) (Nine)

Senator Di Natale said almost seven million Australians had tried or used cannabis, with consumption and drug possession-related arrests both on the rise.

The Greens leader, a former drug and alcohol doctor, said Australia's tough approach to drugs had caused enormous harm.

"It drives people away from getting help when they need it and exposes them to a dangerous black market," Senator Di Natale said.

"The Greens see drug use as a health issue, not a criminal issue."

Senator Di Natale pointed to a recent poll showing 55 percent of Australians believed cannabis should be regulated and taxed like alcohol or tobacco.

A national agency would be established to issue licences, monitor and enforce conditions and oversee regulations. (AAP) (Nine)

He expects the plan to raise hundreds of millions of dollars in revenue, helping fund treatment, education and other harm reduction programs.

"I call on political parties of all stripes to join the Greens in committing to just legalise it," he said.

Alex Wodak, president of the Australian Drug Law Reform Foundation, welcomed the announcement.

"Banning cannabis hasn't reduced its use or availability yet it has distracted police from following up more serious crimes, harmed a lot of young people and helped make some criminals rich," Dr Wodak said.