The peak body for Indigenous children in Australia has welcomed the next step in the appointment of a national commissioner to turn around the over-representation of Aboriginal and Torres Strait Islander children in out-of-home care and youth detention.

On Friday, the government said the National Commission for Aboriginal and Torres Strait Islander Children and Young People will begin operations in January, with a First Nations person to be appointed to lead the body.

The Executive Order to establish the National Commission as an Executive Agency has been gazetted, which sets up the structure to enable the work of the Commissioner.

SNAICC – National Voice for our Children said the announcement was a "major milestone," with chief executive Catherine Liddle saying recruitment for the National Commissioner role was expected to open this month.

"This is an exciting and historic step to realising the position of National Commissioner," Ms Liddle said, who is also chair of the federal government's Safe and Supported Aboriginal and Torres Strait Islander Leadership Group, said.

"Through shared decision-making processes we have been able to establish strong functions that reflect the Aboriginal and Torres Strait Islander sector's long-held ambition to have a National Commissioner with real authority and real teeth."

Me Liddle said the position will be autonomous and will have the power to investigate and tackle the serious issues impacting First Nations children, including the over representation of Aboriginal and Torres Strait Islander children in out-of-home care (OOHC).

The latest Closing the Gap figures revealed First Nations children are removed from their families at a rate of 57.2 per 1,000 — 12.1 times that of non-Indigenous children.

Only NSW, ACT and the NT saw a decrease in the rate from 2022, with Victoria - the worst performing state - removing more than one-in-ten Indigenous children from their families, at a rate of 102.9 per 1,000 children — 22.5 times the rate of non-Indigenous child removals.

"The over-representation of young people in out-of-home care and youth detention is unacceptable," Minister for Indigenous Australians, Malarndirri McCarthy, said.

"The National Commissioner will focus on working with First Nations people and organisations on evidence-based programs and policies to turn those figures around.

"The National Commissioner will be informed by the experiences of Aboriginal and Torres Strait Islander children and young people, whose voices deserve to be heard."

The government said the Commissioner - who will "champion hope" - will work directly with First Nations children and young people, listening to and amplifying their voices, needs and aspirations, along with those of the broader community.

Ms Liddle agrees.

"They will be the champion, the voice and facilitator for our children, young people and families, and who will hold governments to account," she said.

SNAICC have long called for the position, with their 2023 Family Matters report arguing it would be the most "effective and immediate action the government can make to ensure the safety and protection of our children".

Ms Liddle said it was important to note this "long-held ambition" has been realised due in large part because of the "levers that exist in the National Agreement on Closing the Gap".

"A critical next step will be to progress legislation to further strengthen the powers and independence of the National Commissioner," she said.