Victoria is bringing in new rules that will affect the way religious schools hire and fire staff.
These institutions will no longer be able to fire an employee on the basis of their sexual orientation or gender identity.
They will also be banned from refusing to hire someone if they are a part of the LGBTQIA+ community.
Attorney-General Jaclyn Symes said the state government is cooking up new legislation that will close an 'unfair, hurtful' loophole that has previously allowed these schools to discriminate against staff by using their religion as the basis for their decision.
Faith-based organisations have actually been allowed to also discriminate on the grounds of martial status and gender as well, according to The Age.
But it's hoped these new laws will prevent any of that happening in the future.
The state's AG said in a statement: "People shouldn't have to hide who they are to keep their job.
"We're closing this unfair, hurtful gap in our laws so that Victoria's LGBTIQ+ community won't have to pretend to be someone they're not, just to do the job they love.
"These laws strike the right balance between protecting the LGBTIQ+ community from discrimination and supporting the fundamental rights of religious bodies and schools to practice their faith."
The current legislation has caused a cloud of terror for non-straight staff who fear they will lose their jobs and livelihoods if they are outed by someone.
The state government is working to ensure the new rules ensure religious institutions are allowed to express their freedoms and these schools have been promised there will 'be no impact on [their] ability to convey their religious beliefs to students'.
Unsurprisingly, the announcement has caused quite a bit of of controversy in the religious community.
Christian Schools Australia has labeled the proposals 'alarming' and indicated it will push back against the legislation.
The lobby group's public policy director Mark Spencer said: "Once again it seems that people of faith in Victoria are being told what they can and can't believe, that religious schools can only hold and act on beliefs that the government determines are acceptable.
"Is the next step for the announced changes to 'anti-vilification' laws to limit what can be taught in religious schools or preached in a church, mosque or temple?"
Under the changes, schools will only be able to discriminate against applicants if it falls under a 'reasonable' and inherent requirement of the job.
The state government gave the example of how a school couldn't refuse to hire a teacher if they were trans, however they would be able to not hire them as a religious studies teacher because of their own personal religious belief.