Anxious new parents and carers will be protected from being "preyed on" by baby formula manufacturers using "shady" and "irresponsible" marketing tactics.

Australia's Department of Health has committed to mandating an industry code that oversees advertising standards around baby formula.

The new code would replace the voluntary and self-regulatory Marketing in Australia of Infant Formulas (MAIF) agreement, which restricts infant formula manufacturers and importers who opt-in from advertising and promoting formula for infants up to 12 months of age.

The current agreement carries no penalties for breaches, has limited ability to regulate digital marketing practices or manage complaints and does not extend beyond products advertised to children over 12 months old and toddler milk products, the department said in a submission to the Australian Consumer and Competition Commission.

"Effective regulation is essential to protecting and promoting breastfeeding, which in turn supports public health outcomes," the department said.

The move has been welcomed by public health groups who say it will help protect children's health and prevent parent confusion.

While infant formula remains a safe alternative for parents who are unable or choose not to breastfeed, the current code has allowed manufacturers and retailers to irresponsibly market their products, Australian Medical Association President Danielle McMullen said.

"It's not uncommon for new parents to experience some anxiety about infant feeding, and these shady marketing campaigns prey on this anxiety by promoting their products at a time of potential vulnerability for many parents," Dr McMullen said.

"Despite being unnecessary for children and unhealthy, we have seen 'toddler milks' (for ages 12 months and over) deceptively advertised as beneficial - this a milk myth that must be exposed."

The Public Health Association of Australia says the current voluntary agreement is ineffective, unenforceable and limited in scope.

"Infant formula manufacturers worldwide have a history of unethically promoting their products - putting profits before baby health," association vice president Professor Kathryn Backholer said.

"This marketing is designed to influence parents and caregivers and can ultimately cloud their judgement when they are trying to make the best decisions for their babies and toddlers."

The consumer watchdog in September denied a proposal by the Infant Nutrition Council, the peak body representing infant formula manufacturers, to extend the voluntary agreement for a further five years.

However, the government has asked the ACCC to reauthorise the current code for another two years, with mandatory controls, as it establishes the new code.

Monitoring and compliance checks around social media promotion and influencing formula products will be boosted during the transition period.