Asylum seekers will receive housing, food and other necessities from the Victorian government after the Commonwealth cut off their support.
The Andrews government will provide $600,000 for the asylum seekers living in Victoria so they "don't starve on the streets".
The federal Coalition government has cut income and accommodation support for up to 400 asylum seekers in Australia, Fairfax Media revealed last month.
The asylum seekers had been brought to Australia for medical treatment from offshore detention, including some family members of patients. But the federal government's decision means they will be transferred to final departure visas and eventually forced to leave the country.
The new visa conditions resulted in the asylum seekers losing federal income payments and they were given three weeks' notice to vacate their accommodation.
The federal government had also expected the asylum seekers to sign a Code of Behaviour.
However, the state Labor government has confirmed it will establish a housing fund to cover accommodation costs and keep people in their current houses if possible.
It will also pay for other necessities, including food, clothes, myki cards and medicine.
Case workers will be provided for those who need additional help with the intention of maintaining existing relationships with support workers and community organisations.
The support measures will be available immediately.
Premier Daniel Andrews lashed out at the federal government for its treatment of the asylum seekers.
"Malcolm Turnbull might be prepared to stand by and let these families starve while they wait to leave Australia - but we won't," he said.
The state's support package comes after Mr Andrews wrote to the prime minister last year offering to take "full responsibility" for asylum seekers who faced being sent back to Nauru.
Human Rights Law Centre believes just over 60 asylum seekers had already moved onto the new regime, including 26 in Victoria.
But the Andrews government expects that number will soon surpass 100.
Human Rights Law Centre legal advocacy director Daniel Webb said the men and women issued with new visas had just started rebuilding their lives in Australia.
"Now suddenly they've been completely cut off and are a week away from potential homelessness," he said. "The [federal] government is forcing them to choose between destitution here or danger and abuse elsewhere. Essentially, they are being starved out."
The hundreds of people who had not yet been forced onto the new visas were terrified, Mr Webb said.
"It's awful. They panic every time the phone rings."
Comment has been sought from Immigration Minister Peter Dutton's office.