Most controversially, the independent advisory body called for speed limits to be reduced to 30km/h on streets frequented by children such as those around schools, playgrounds, childcare centres and kindergartens.
It said seven children die each year on Victoria's roads and almost 300 are seriously injured, mostly on local streets with speed limits of 50km/h.
Jack Davey, 11, died and four other students were injured in October when a car ploughed through a fence at Auburn South Primary School in Hawthorn East.
Teacher's aide Eleanor Bryant was killed the following month after she heroically pushed children out of the way of a water tanker as it crashed into the Macedon Ranges Montessori Preschool.
The report cited research that a pedestrian hit by a car at 50km/h had an 85 per cent chance of dying, compared to 40 per cent at 40km/h and 10 per cent at 30km/h.
Under a long-running trial, the City of Yarra has 30km/h zones in Fitzroy and Collingwood.
Other 40km/h zones only apply to schools at certain times and some other busy areas, and the change should cover streets with speed limits of 50km/h or below, the report said.
Premier Jacinta Allan was non-committal on whether the government would heed the advice but acknowledged drivers slowing down would save pedestrians' lives.
Opposition roads spokesman Danny O'Brien said the coalition did not support blanket 30km/h speed limits in suburban or regional streets, calling it a "nanny state solution".
Ben Beck, a mobility and safety researcher at Monash University, said Australian kids were among the world's least physically active but 30km/h speed zones would help stop the rot.
"Our streets are no longer what they used to be - kids and parents do not feel that it's safe to be walking, riding, scooting to school," the associate professor said.
The strategy, which is updated every three to five years, contained 43 recommendations and seven "future options".
Other notable suggestions were cheaper commuter fares outside peak periods, more goods being delivered during quieter hours to ease road congestion and a 15-year plan to provide 60,000 social homes.
The government should also examine expanding water desalination capacity, reconfiguring the City Loop and plan for the Melbourne Metro 2 rail project, Infrastructure Victoria said.
The draft recommendations have an estimated price tag of between $60 billion to $75 billion but Infrastructure Victoria said they can generate at least $155 billion in benefits over the next decade.
The final strategy will be tabled in parliament in late 2025 following community consultation.
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