Australia's best performing teachers would earn $80,000 more a year and promising school leavers would receive scholarships to encourage them into education degrees under a blueprint to address declining standards.

The number of high achievers becoming teachers has dwindled over the last four decades and the low status of the profession was now self-reinforcing, Grattan Institute researchers concluded in a report on the need to transform the school workforce.

Scholarships and payrises would be introduced under a plan to boost the status of teaching.

"Australia needs more high achievers in teaching, because great teachers are the key to better student performance," said the think-tank's school education program director Peter Goss.

The plan would introduce scholarships worth $10,000 a year for top school leavers who go on to study teaching. Those recipients, achieving an ATAR of 80 or above, would then be required to work in government schools for a number of years.