Urban Victorians consume more heroin than other Australians and the state's regions have recorded the highest use of MDMA and oxycodone.
The Australian Criminal Intelligence Commission's seventh report of the National Wastewater Drug Monitoring Program shows Victoria has the highest average capital city consumption and second highest average regional consumption of heroin nationally.
The state also had the highest average regional consumption of MDMA and oxycodone and the second highest average capital city consumption of cocaine in the country.
The ACIC report covers about 12.6 million people, or 54 per cent of the population, and examined wastewater at 50 treatment plants across the nation for 13 substances.
"The Australian community continues to consume illicit drugs at concerning levels," ACIC chief Michael Phelan said in a statement.
Health Minister Jenny Mikakos said the state government had made significant investments in rehabilitation programs to tackle the scourge of drugs.
"We have seen very concerning increases in ice usage across our community, that's why in our first term of government, one of the very first things that we did do in our first 100 days was in fact to release an ice strategy," Ms Mikakos told reporters on Monday.
While Victoria is ahead on heroin, MDMA and oxycodone consumption, the national figures point to legal drugs - nicotine and alcohol as the most consumed drugs.
Of the illegal drugs, methylamphetamine remains the highest one consumed by far.
Australians consumed 9,847 kilograms of meth in the year ended August 2018, the fresh analysis of wastewater data found.
This was followed by 4,115kg of cocaine, 1,162kg of MDMA and 750kg of cocaine.
NSW led the country in cocaine consumption, Queensland and South Australia favoured fentanyl while the Northern Territory had the highest consumption of alcohol and nicotine.
Western Australia continued to produce some of the highest meth consumption levels in capital city and regional areas while Tasmania had the highest average capital city consumption of MDMA, oxycodone, fentanyl and cannabis nationally.
Australian Associated Press