There were 363 Buruli ulcer cases detected in the state last year, up from 338 cases in 2022.
The ulcer is caused by a bacterial infection that can create significant skin damage including painful lumps, limb swelling and occasionally severe pain.
But experts say the mosquito-linked condition can be treated with antibiotics if diagnosed early.
"We need GPs and the community to be aware of that," Barwon South West public health unit director Eugene Athan told AAP.
"If it gets beyond a few weeks then it can be much more difficult to treat.
"It can take longer, sometimes you have to perform surgery to clean up the wound and people are out of options."
Buruli ulcer cases were once only found in the East Gippsland region but they have gradually migrated to the Bellarine and Mornington peninsulas, as well as Melbourne's northern suburbs.
"There's been a lot of good research from our team and others that have shown possums do concentrate the bacteria in the environment," Professor Athan said.
"As animals move from place to place, they may be bringing the bacteria with them.
"What we don't completely understand is how the bacteria gets from the environment to causing infection on humans through skin."
People can avoid infection through protective measures like using insect repellent and covering up when outside, Prof Athan said.
It was also important to immediately disinfect any scratches or wounds to reduce the risk.
"A non-healing wound, sore or lump on the skin that lasts more than a few days should alert people to the possibility of it being a Buruli ulcer," Prof Athan said.
"That usually indicates they should at least go and have it looked at by a GP and get a swab done.
"But keep in mind that it is very treatable - we have an about 100 per cent cure rate as long as people make a diagnosis early."
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