Victoria is the first state in Australia to make pain relief for mulesing sheep mandatory.
Victorian Farmers Federation Livestock Group president Len Vallance said the organisation's call for pain relief to be made mandatory, led to the state government backing.
The new regulation will be included in the government's review of Victoria's Prevention of Cruelty to Animals Act.
It's expected to come into law in December next year.
VFF Livestock Group president Len Vallance said the organisation set the agenda on mandatory pain relief, in May.
"The Livestock Council made a unanimous decision to lead the industry in mandating pain relief," Mr Vallance said.
"The feedback we've received from our members, farmers and industry commentators has been extremely positive.
"We believe it's necessary for industry to continue to have a social licence to mules - we don't have a right to farm, we have a social licence to farm."
The practice involves cutting wrinkles of skin away from a sheep's breech, to stop blowflies, which are attracted to faeces.
Mr Vallance said more than 90 per cent of Victorian farmers used pain relief already.
"The lambs do so much better - it's a money making exercise, to use pain relief," he said.
"For two dollars a head, and one and a half seconds extra in the operation, what's all the fuss about?
"The point is, if you are going to mules, you have to use pain relief."
Mr Vallance said he, like many others, would like to see better ways of stopping fly strike and science and genetics would eventually solve the problem.
"But that needs a lot more money than is currently being spent on it."
Better ways of mulesing, through improved genetics, would also take a lifetime.
"We have lobbied long and hard to have better delivery systems for vaccines and have long wanted better ways to deliver drenches to animals," he said.
"Delivering pain relief is another one of those areas."
The sheep and wool industry was on a wave and needed to keep innovating.
"Any business that stands still, is finished."
Mr Vallance said the feedback the council had received from its members, farmers and industry commentators had been extremely positive.
"The draft regulation, which will be available for public consultation in August, stipulates that any mulesing procedure on sheep must be accompanied by an approved pain relief medication," Mr Vallance said.
"We will be providing more information to our members in the coming weeks to prepare them for the regulatory change."
He said it was another step to further bolstering Victoria's best practice animal welfare.