A newborn baby boy found dead in a shopping bag dumped at a country Victorian bus stop still had his umbilical cord attached, police say.

The baby was a Caucasian male and preliminary tests showed the infant was just 24 to 48 hours old.

Investigators believe the mother may have given birth without medical assistance, as the torn umbilical cord still attached to the baby indicated it was not surgically cut.

It is not known whether the baby was alive when he was born, police said in a statement.

The boy was dressed in a yellow singlet with a blue jumpsuit and wrapped in a yellow polo fleece, with another yellow wrap around it.

The body was placed in a green canvas shopping bag which was found by a man putting out his rubbish bins at about 5.30pm (AEST) on Wednesday in a bus shelter at Grahamvale, near Shepparton.

Investigators hold grave concerns for the mother's welfare and have urged her to seek medical care.

Homicide Squad Detective Sergeant Graham Guy said it was not known when the baby was dumped, but a sighting near the bus stop may offer the clue.

"Between 4.45pm (AEST) and 5pm last Tuesday evening a man observed a silver or white sedan parked directly in front of the bus stop with a woman at the boot area carrying a green enviro bag.

"The woman was described as Caucasian, aged in her 20s to 30s, with fair-coloured hair," he said.

It is believed the woman was at the bus stop on her own.

Investigators are encouraging the woman to come forward and have appealed to anyone else who might know the identity of the mother.

They have also asked to hear from any hospital or medical staff that may have treated a woman for after-birth care in unexplained circumstances.

An autopsy was being conducted on the baby on Thursday.