Critics of the race, which moved from Adelaide to Albert Park in 1996, say losses of A$50 million ($52.09 million) a year are a waste of public money but Baillieu said it was a major asset for the city.
"There are three more races under the current contracts and we will see out those and commence discussions at an appropriate time," he told reporters in Melbourne.
"I say again the grand prix has been good for this state, good for this city and is a key part of our major events calendar and that calendar gives Victoria a competitive edge.
"I am very confident that the grand prix has been good for Melbourne and Victoria, will be good for Melbourne and Victoria.
"We intend to do whatever we can to ensure our major events calendar remains strong and the grand prix has been a part of that and we look forward to it being a part in the future."
The row over the future of the race exploded again last month when the Herald Sun newspaper reported leaked documents as revealing that the Victorian government paid Formula One supremo Bernie Ecclestone more than A$30 million a year for the rights.
Baillieu said the report had misrepresented the nature of the fee.
"Those fees cover the arrival, the production of the grand prix itself - all of the equipment and personnel that is brought here - and they go to the company which runs the grands prix around the world," he said.
With cities around the world lining up to host Formula One races at times more conducive to large television audiences in Europe, Ecclestone has long made it clear that the sport could walk away from Australia if a new deal is not struck.
The Australian Grand Prix opens the new Formula One season on March 17.
- Sports & Recreation