Under new Education Department rules, schools will not be entitled to extra portable classrooms from next year if 50 per cent or more of their students do not live locally.

Turning away out-of-area families has been a long-running practice at zoned schools and now, other schools will start refusing enrolments on similar grounds.

The move is a departure from successive governments' mantra of families being able to choose the school of their choice, and is aimed at curbing the growth of large schools and encouraging students to attend their nearest school.

It follows a 2017 Auditor-General's report which revealed more than half of Victorian parents now avoid their neighbourhood school.

Around 15 per cent of Victorian schools – or about 230 schools– received a phone call from the Education Department late last week and were told they'd be impacted because at least half their enrolments were non-local.

The education department told The Age these schools also had limited space.

The plan has divided the community:  principal groups and the state opposition have slammed it as ill-conceived while the Australian Education Union, parent and public education lobby groups say it will lead to better outcomes for students.

“It has been a clandestine strategy to wind back parent choice and to save money in the process,” Berwick Lodge Primary School principal Henry Grossek said.

Mr Grossek said 70 per cent of his enrolments are from outside the local area, and many of these students bypassed their closest school because it was overcrowded.

If enrolments increase to the point where he needs a new portable he'll have to reject prospective out-of-area students because he won't be provided with facilities to accommodate them. This will exacerbate enrolment pressures on other schools, while his school has capacity for more students, he said.

“Up until last last week we were advised that unless your school has a zone, you must take kids from outside your neighbourhood,” he said. “Now that's all changed.”

Education Minister James Merlino said schools could accommodate non-local students if there was enough space.

"We can’t have schools where they are accepting enrolments from the other side of the city which results in dozens of portables taking up vital space where children play," he said.

"It also adds strain on the school when they need to accommodate local children in future years."

Victorian Principals Association president Anne-Maree Kliman said principals were not consulted and had been put in a difficult position as they started enrolling students for 2019.

“Now they have been told they won't get facilities if they need them,” she said.

She suspects the “drastic” change is a response to Victoria’s booming student population and aimed at ensuring there's a more even spread of students across schools.

While some schools have empty classrooms and are screaming out for enrolments, neighbouring schools are cramming students into three-storey portables.

The move could be politically sensitive ahead of November's state election, with the opposition's education spokesman Tim Smith accusing the Andrews government of "punishing kids and parents for simply choosing a school that isn't the closest to their home."

But Australian Education Union Victorian branch president Meredith Peace said letting students attend the school they want and allowing schools to grow risked creating a "stratified education system".

Cate Hall,  the president of public education lobby group Our Children our Schools, said attending the local school strengthened communities and encouraged students to walk and cycle.

According to Ms Hall, the school choice mantra has "resulted in poor equity outcomes, with some schools lacking both students and resources, and others crammed with portables".

Parents Victoria executive officer Gail McHardy said attending the local school should be a priority, but governments needed to ensure every school was funded properly.

Divya Sharma is among tens of thousands of Victorian parents whose children don't attend their closest school. Her daughter Lavanya, who is in grade 5 , and son Eshan, who is in prep, attend Glendal Primary School in Glen Waverley.  She was attracted to the school's dedicated teachers and impressive robotics program.

The family used to live in a unit in the area, but upsized to a house in Mount Waverley more than a year ago.

"I want to choose which school I send them to," she said. "It's critical."