The state opposition says the city is not sprawling fast enough, and has accused Labor of not keeping up with Melbourne's soaring population.

The release of the new housing lots will ultimately create 17 new suburbs across sites in outer Melbourne.

And, more than two years since it made a promise to trial a pilot to deliver cheap homes, the government has pledged to deliver 100 affordable houses – but only on government land.

Treasurer Tim Pallas and Planning Minister Richard Wynne on Tuesday went to a Stockland housing development called Cloverton in Kalkallo, 37 kilometres north of the CBD, to make the announcement.

The Stockland land, which has already been rezoned, was brought into Melbourne's urban growth boundary in 2010 by Labor's John Brumby, in one of the biggest land rezonings in Victorian history.

Stockland's Mike Davis put the size of his company's land to be built on into perspective: "If you were to overlay Cloverton on a map of Melbourne, it would stretch from Albert Park in the south to Brunswick in the north."

Tuesday's announcement will add more housing to the Kalkallo and Donnybrook area – despite its only public transport being Donnybrook railway station. Fourteen trains a day leave Donnybrook for Melbourne.

As well as releasing land for housing, the government will make it easier for developers to subdivide land and speed up planning applications.

Melbourne land prices remain about "half that in Sydney", a government release said. It also said the land release would help maintain that.

As part of the latest land release, the planning minister will begin a long-promised pilot program to deliver 100 new "social housing dwellings" on government land.

The government's $26 million program to encourage private developers to provide inclusionary housing in new developments will be done in established suburbs, not greenfield developments.

The five Melbourne sites to be developed are mostly ex-public schools: the former Broadmeadows Primary School, the old Mount View school in Boronia, land in Reservoir's Dumbarton Road, and land once used by Noble Park's Athol Road School.

In opposition, Labor accused the Napthine government of having "done nothing to fix housing affordability".

When the Andrews government was elected, Melbourne's median house price was $627,068, Domain Group data shows. Today the city's median house price is $795,447.

Last year, Mr Wynne boasted that he had approved $2 billion in development approvals in inner Melbourne.

At the time, housing groups complained that none of these approvals had forced developers to include any affordable housing in their projects.

The government said in November 2014 it would pilot "inclusionary" zoning on government-owned land.

Its planning policy said: "Labor will pilot the use of inclusionary zoning as a new affordable housing initiative for land sold by the government for development, requiring a share of new construction to be affordable to first home-owners and low income families."

Inclusionary zoning is a common practice in some overseas cities where developers are granted building approval on the strict condition they build a proportion of affordable housing.

Victoria will only trial the practise on publicly owned land, and will not force developers to include affordable housing in private developments.

The government's release on Tuesday said the pilot program would allow private developers to "innovate to provide inclusionary housing in new developments".

Mr Pallas said the release of housing lots would help "make housing more affordable".

"This increase in supply is also a boost to the construction industry, creating jobs in the growth corridors, as well as in established suburbs," he said.

Mr Wynne said the inclusionary housing pilot would "create up to 100 new social housing homes, helping Victorians in need".

Opposition planning spokesman David Davis said that Labor was not adding enough housing to Melbourne, and that the city's population had grown by 250,000 since Daniel Andrews became premier.

"By the time these developments are ready our population will probably be another 150,000 more," he said.

Asked whether there would be adequate infrastructure installed in the developments ahead of housing being built, Mr Pallas said Labor was spending more than its predecessors on projects like the Mernda rail line and new outer suburban roads.

Mr Wynne said the government had "learnt from the mistakes of the past", and that purchasers in new estates wanted to see infrastructure such as "the schools, the shopping centres, the employment centres that will be available locally".