A five-year national project is aiming to improve the mental health of Indigenous children through better sleep habits.

Led by the University of the Sunshine Coast, the initiative will be co-designed with Elders and delivered across 18 rural and remote communities in Queensland, South Australia and the Northern Territory.

Kalkadoon Elder Aunty Joan Marshall OAM said proper sleep was essential for cultural and emotional wellbeing.

"If our kids don't get proper sleep, then they are walking on thin air; it turns them into zombies because it messes up with their heads," Aunty Joan said.

"We need to start early to help our children develop good sleep habits, so they don't end up with mental health problems or be at risk of self-harm."

The program is being led by University of the Sunshine Coast sleep scientist Professor Fatima Yaqoot, who has received a $5 million Childhood Mental Health Research Plan grant.

Professor Yaqoot said the program would focus on sleep as a key mental health factor for First Nations children.

"Despite strong advocacy and compelling evidence, sleep has not previously been considered as a key intervention to reduce the risk and severity of mental health outcomes in First Nation's children," she said.

"This program will change that."

Professor Yaqoot said limited data suggests one-in-three children under eight struggle with sleep, and half face emotional and behavioural issues.

"Sleep is considered as a key factor for everyone's mental health and physical health, but in First Nations culture, there's also a spiritual impact of poor sleep, which has not been documented before," she said.

The program builds on Professor Yaqoot's earlier work with Let's Yarn About Sleep, a program designed for First Nations teenagers and adults.

"When we finished that project last year, Elders and parents told us they were keen for our next research priority to focus on young children and their families," she said.

Researchers will collect new data on sleep difficulties while also analysing a decade of health service records to better understand patterns in sleep-related issues among children using mental health services.

Professor Yaqoot said the findings would inform new sleep health action plans and a national blueprint tailored for First Nations children.

The program will work alongside partners including the Royal Flying Doctor Service and will involve primary schools, early learning centres, GPs and psychologists.

Caregivers and children aged 8-to-12 will be invited to attend community workshops delivered by primary care staff and trained First Nations sleep coaches.

Schools will receive tailored resources and training to support school-based sleep education and early intervention tools will be co-designed for health professionals working with First Nations families.