The statewide plan features 22 "concrete" actions, including carefully managing the outward sprawl of regional cities and towns to accommodate for more homes.
Geelong, Ballarat and Bendigo - slated for more than 200,000 extra homes over the next 30 years - will be the first centres to have boundaries developed.
The boundaries will expand outward if consistent with the "vision" for the areas and councils and other authorities can provide the necessary infrastructure such as water and sewerage to cope with more people.
Many small places won't expand, the 92-page document says.
Melbourne's defined boundary, as well others that are operating or soon will be in the Bass Coast, Surf Coast, Bellarine Peninsula and Macedon Ranges, will remain unchanged.
New guidelines developed with councils for establishing and amending regional city boundaries will be made available for other regional cities and towns.
Ms Allan, who lives in Bendigo, said the boundaries would promote sustainable and even growth and protect agricultural land.
The dream of home ownership has been made "impossible" for many Millennials and working families by the housing crisis and the state has "one chance" to fix it, the premier said.
"We have to bust open the status quo," she told reporters in Ballarat.
"Plan for Victoria addresses that key issue that we've had in the past 30 years where growth across Victoria hasn't been even.
"It's put too much pressure on some communities, while in other communities young people and working families have been locked out."
The plan replaces the existing Plan Melbourne 2017-2050 strategy and regional growth plans.Â
More than seven million people live in Victoria, the second highest population of any Australian state or territory, but the Australian Bureau of Statistics forecasts that number to rise to 11.5 million by 2055.
To cope, the government estimates another 2.24 million homes will need to be built across Melbourne and regional areas.
The Labor state government has been on a housing announcement blitz after it narrowly retained the traditionally safe seat of Werribee in a by-election triggered by the retirement of treasurer Tim Pallas.
Policies have ranged from housing approval targets for all 79 councils across the state, a new townhouse code and revealing the final 25 of 60 Melbourne locations in line for increased housing density.
The entire City of Melbourne and Yarra local government areas were designated "activity centres" in a bid to build more than 300,000 homes in suburban areas close to train and tram links by 2051.
Under the controversial rezoning plan, building height limits will be increased to between three and 12 storeys in most centres and up to 20 storeys in the largest housing hubs.
Neighbouring areas up to 800m from stations will have height restrictions between three and six storeys, depending on block size and whether sites are considered to be in inner or outer catchments.
Melbourne was expected to overtake Sydney as Australia's most populated city by 2034-35.
But the federal government's latest annual population statement revoked that prediction after reassessing overseas migration flows.
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