A South Sudanese refugee in Australia, who killed three of her children by deliberately driving them into a lake, has had her jail sentence reduced on appeal.

Akon Guode was convicted last year of killing Bol, one, and twins Hanger and Madit, both four, in Melbourne in 2015.

Her original maximum 26-year jail term was reduced to 18 years on Thursday.

A judge said the "manifestly excessive" first sentence had not given enough weight to Guode's mental state, and the trauma she had endured in South Sudan.

Last year Guode pleaded guilty to murder, infanticide, and attempted murder. She did not reveal a motive for the killings, a court heard.

A fourth child, six-year-old Alual, had also been in the car but survived after witnesses rushed into the water.

On Thursday, the Victorian Court of Appeal said Guode had "fatefully and irredeemably breached" her children's trust, but found that "her capacity to make calm and rational decisions was severely compromised by a mental condition".

Chief Justice Anne Ferguson said that "that the balance of [Guode's] mind was disturbed" after she had life-saving surgery due to complications with the birth of her youngest child, Bol.

She also noted that Guode, who came to Australia as a refugee in 2008, had witnessed her husband's murder in South Sudan and endured other trauma.