A country Victorian council will be sacked following a probe into the murder of a senior manager, who was gunned down by a disgruntled worker.

Events after the murder, governance concerns, flood mitigation efforts, construction of major infrastructure, the transportation of asbestos and other issues such as health and safety were also examined by a commission of inquiry into Moira Shire Council in northern Victoria.

On Tuesday, the state government introduced legislation to dismiss the council and appoint an administrator as recommended by the commission.

It is expected an election to replace the councillors will not take place until 2028.

Local Government Minister Melissa Horne described the report as deeply concerning.

"Councils must properly represent the communities they serve, and Moira residents deserve to have a council that puts their interests first," Ms Horne said in a statement.

The commission has referred evidence to the coroner about events related to the death of council operations manager Rick Devlin.

Former council worker Andrew Robert Paterson is serving a minimum 21-year sentence after pleading guilty to the murder of Mr Devlin in August 2021.

He wrongly believed Mr Devlin was involved in a harassment campaign against him at work, although the men did not have day-to-day contact.

The commission report said there was good reason to think Mr Devlin's death may have been preventable and the environment of the Nathalia depot Mr Paterson worked at was fundamentally unsafe.

"These events and their tragic outcomes represent, at many levels, a catastrophic governance failure," the report stated.

It said the council's senior executives should have been aware of risks at the depot since 2017, when an external investigator found evidence of a dysfunctional and a toxic culture.

The commission has also contacted the Independent Broad-based Anti-corruption Commission about two instances of alleged corrupt conduct.

The report found the governance of Moira Shire Council had deteriorated to such a level that it could no longer carry out its responsibilities under the Local Government Act.

The council will review the findings and seek advice.

Chief executive Clare Keenan said the organisation was focused on the health of those impacted by the report.

"We understand that the findings of the report may be confronting for our staff and their families, and concerning for our community," Ms Keenan said in a statement.

"Our priority continues to be the wellbeing of staff, and we have implemented measures to ensure they have support."

An interim administrator will be appointed for three months, before a longer-term panel of administrators is found.

It is the sixth council sacked by the Andrews government since it came to power in 2014, while municipal monitors have also been appointed to observe and give advice at various times to Ararat, Frankston, Yarra, Strathbogie Shire, Wodonga and Darebin councils.

COUNCILS DISMISSED BY ANDREWS GOVERNMENT

* Geelong - 2016

* Central Goldfields Shire - 2017

* South Gippsland Shire - 2019

* Casey - 2020

* Whittlesea - 2020

* Moira Shire - March 2023

MUNICIPAL MONITORS APPOINTED

* Ararat - 2017-2019

* Frankston - 2017-2019

* Casey - November 2019 until dismissal in 2020

* Whittlesea - December 2019 until dismissal in 2020

* South Gippsland Shire - 2022-2022 (after 2019 dismissal)

* Yarra - 2021-2022

* Strathbogie Shire - 2021-2022

* Wodonga - 2022

* Darebin - 2022

* Moira Shire Council - 2022 until Commission of Inquiry probe