The Geelong Council will be investigated by an independent panel following a damning report that found it harbours a culture of systemic bullying.
The Commission of Inquiry will look at the roles and responsibilities of all levels within the council and the effectiveness of the current governance system.
The panel will also investigate matters of harassment and bullying brought forward by former commissioner with the Australian Human Rights Commission, Susan Halliday, in her workplace culture review report in October this year.
"It is clear that a significant number of people have felt undervalued, unfairly treated and bullied," Ms Halliday said at the time.
Although Ms Halliday found an endemic culture of bullying, sexism and favouritism within the Geelong Council, she said the council was taking steps to fix its problems.
The panel will have full access to council meetings, documents and witnesses.
Mayor Darryn Lyons welcomed the inquiry into the "adequacy of my council's governance".
"These important topics deserve the utmost respect and attention, and my fellow councillors and I will cooperate fully with the inquiry to ensure its findings truly reflect the current and future direction of this organisation," he said in a statement.
The inquiry will conclude on March 31, 2016.
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