Teen terror suspects as young as 14 could be locked up for two weeks without charge as Victoria reacts to its most recent terror attack.
But the Islamic Council of Victoria has already warned against locking up radicalised youths, saying it has a "dampening effect on Australian Muslims' freedom of religion".
Terrorist Yacqub Khayre, 29, killed one man and injured three police officers in Brighton on June 5, telling a TV station he was doing it for Islamic State and al-Qaeda.
Premier Daniel Andrews said he had spoken to police about the "gaps" in dealing with teen terror suspects who pose an unacceptable risk.
"Now it is time to look at additional powers. We will make changes that will not be universally popular because it is our judgement that is what is needed," he told reporters on Tuesday.
"We will have proper oversight. It will be a responsible package of measures and we will have more to say on that soon.
"The challenge is, of course, those who present as a potential threat that may not yet have committed a criminal act, or their past may not be closely associated with terror so those national powers don't kick in."
He said proposals taken to COAG on Friday were either rejected or put off by the prime minister.
"We do not rule out getting on with this. In fact, we are going to get on with this because it is what is most important," Mr Andrews said.
The proposal follows similar laws to those introduced in NSW in 2016, which the ICV slammed in a submission to the parliamentary inquiry into religious freedom in May.
The ICV, which did not respond to AAP's requests for comment on Tuesday, says Muslim communities "shoulder a heavier burden of proof and endure more intrusion than others".
"While only a few children might come under the spotlight, the damage the legislation will do is enormous to the multicultural and multi-faith communities," its May submission reads.
Opposition Leader Matthew Guy said he supported the proposed changes to the law to manage security and safety, and called for a policy of mandatory sentencing and bail reform.
Mr Andrews also told three federal ministers who criticised Victorian judges over terror sentencing to be "careful" about cases that are before the courts.
Federal Health Minister Greg Hunt was one of three MPs who said Victorian appeal judges appeared to be endorsing shorter terror sentences.
But Judicial Conference of Australia president Justice Robert Beech-Jones said the MPs' comments were "unfounded, grossly improper and unfair".