Koala populations in some areas of the country had reached a level where food and space were becoming scarce, Victoria state Environment Minister John Thwaites said on Sunday.
The animals are basically tree-dwelling and the eucalyptus leaves are their main source of food.
Thwaites said a trial using small plastic tubes implanted under the skin of female koalas to release hormones similar to those used in human birth control pills had proved successful.
"Trials have shown that use of the hormone implants has prevented conception for six years in a population of wild koalas," Thwaites said.
Koalas are Australia's best-known native animals after kangaroos but Thwaites said more studies were needed to be carried out into factors affecting their populations.
"In some areas in Victoria, koala population numbers are growing so quickly as to be unsustainable while, in others, their numbers are declining," he said.
"We recognise the need to manage our koala populations in a coordinated and comprehensive way so their futures remain solid."
Victoria wildlife experts considered sterilising or relocating the koalas but found contraception with hormones was the most practical alternative.
Koalas are not regarded as an endangered species but have faced pressure in recent years as development encroaches on the eucalyptus forests they inhabit.