The Queen Victoria Markets in Naarm (Melbourne) on Wednesday announced the sale of inauthentic Aboriginal Art will be banned from the market space.

This comes in reaction to new laws in 2023 to crackdown on fake Aboriginal souvenirs, with Productivity Commission data showing at least two in every three Indigenous souvenir purchased is inauthentic.

With prolonged concerns over many years about the authenticity of Torres Strait Islander and Aboriginal products sold Australia-wide, Naarm Lord Mayor Sally Capp has encouraged the Market to act now before the new laws come into effect.

Queen Victoria Market chief executive Stan Liacos said selling inauthentic First Nations Art in the markets was out of touch with today's values.

"Many people would be surprised that this kind of thing is going on right across Australia in 2022," he said.

"Selling inauthentic products isn't just disrespectful to the Aboriginal and Torres Strait Islander community and dishonest to customers.

"It also undercuts Aboriginal and Torres Strait Islander businesses and legitimate artists who are trading in authentic items and trying to make a living.

"We're not waiting for new national laws to come into place - we're acting now."

Indigenous artist and academic Deanne Gibson has thrown her support behind the move.

Ms Gibson said those who commit artistic fraud should be prosecuted.

"It was probably 2020 was the last time I went there actually and there was a little shop and that was selling boomerangs," she said.

"We were shocked we were horrified by it, just like how can this be.

"Everyone is looking for us to cash in on us.

"we've actually got to keep standing up and going, you know what that's not right!"

The ban is an important part of acknowledging the significance of the market site and surrounding area to the Wurundjeri People of the Kulin Nation, who are the Traditional Owners of the land the market now occupies.

The Queen Victoria Markets are built on top of one of Victoria's first cemeteries which holds the remains of the first European colonisers and Aboriginal people.

A Federal Government report into the protection of Indigenous art is due to be handed down by the end of the year.