Homicide squad detectives were called in after a passerby discovered the body on Old Belgrave Rd, Upper Ferntree Gully just after 3pm.
Police are yet to determine the cause of death.
The man was believed to be in his 30s but has not yet been formally identified.
The body was found in a carpark behind the Upper Ferntree Gully Preschool.
An SES officer and plain-clothed officer sought access to the preschool after 7pm.
A local, who was in a meditation class across the road when she heard sirens, described the suburb as a family area.
“I grew up her and I’ve never heard anything like this,” she said.
“It’s definitely not a good feeling.
“Sometimes if I do a workshop here I’ll forget to lock my car. I’m often here late, you always feel safe.”
Police have cordoned off an area on Old Belgrave Rd, near Burwood Highway and Rollings Rd, as investigations continue.
The grisly discovery was made in a busy spot with a strip of shops, Talaska Reserve, veterinary hospital and a primary school in close proximity.
A neighbour to the preschool said they heard car brakes screech around 2pm, but added that wasn’t unusual for the intersection near where the discovery was made.
Another neighbour described the scene as an open area where people often walk past with their dogs, adding Upper Ferntree Gully train station and Angliss hospital, both nearby, were not hubs for trouble.
“They found it in the afternoon,” the neighbour, who the Herald Sun agreed not to name, said.