Victoria has become the first state in Australia to legalise the use of medicinal cannabis.
Children with severe epilepsy will be the first to access to the drug in 2017, Victoria's Health Minister Jill Hennessy said, after the Access to Medicinal Cannabis Bill passed Parliament.
The legislation enables the manufacture, supply and access to medicinal cannabis products in the state.
"We're starting with these children with severe epilepsy, whose lives have been shown to improve so significantly, because we know these children often don't make it until adulthood," Ms Hennessy said.
"We want to improve the quality of their life."
She said it also meant parents of children with the disorder have to purchase the drug illegally.
"I just think that in this day and age, it's unfair and unacceptable to ask a parent to make a decision between obeying the law and acting in the best interests of their child," she said.
"Those parents will no longer have that dilemma."
Ms Hennessy has said access to the drug - available in a variety of forms, including tinctures, oils, capsules, sprays and vaporisable liquids - would be rolled out gradually and eventually be made available to palliative care and those with HIV.
The Australian government said it would set up an Office of Medicinal Cannabis to oversee the manufacture of the drugs and would educate doctors and patients about their role and eligibility for the scheme.
An independent body will also provide advice on the introduction of the drug, which is also legal in more than 20 states in the United States, Spain and Israel.
The Victorian government will undertaking a small-scale, strictly controlled cannabis cultivation trial at a Victorian research facility.
The Queensland government last year announced that a trial to treat children with epilepsy with medicinal cannabis would take place this year.
New South Wales Premier Mike Baird this year announced 330 patients suffering nausea and vomiting from chemotherapy would take part in a clinical trial using a cannabis-derived tablet manufactured by a Canadian company.
The medicinal cannabis trial is the third of its kind in NSW after trials involving terminally ill patients and children with severe epilepsy.