Seven public housing towers in inner Melbourne, which had been in full lockdown since Saturday, will move to stage three from 11.59pm.
One will remain in full lockdown for another nine days, and another has been in stage three since 5pm.
At Thursday's COVID-19 update for Victoria, Emergency Services Minister Lisa Neville said the government encouraged residents of the towers that had tested positive to move to hotels if they wanted.
A total of 111 people in the towers in north Melbourne and Flemington have tested positive for coronavirus, 18 in the past 24 hours. Further test results are expected back later today.
Premier Daniel Andrews said police would be less lenient, issuing fines rather than warnings for people breaching social distancing restrictions, compared to the first lockdown period which applied statewide across March and April.
He said 40 people were in hospital with coronavirus, nine of them in intensive care.
2pm: Victoria has recorded 165 new cases of coronavirus since yesterday, with the total number of cases now at 3098.
The overall total has increased by 156, after 9 cases were reclassified - largely due to duplication.
Within Victoria, 30 of the new cases are linked to outbreaks and 135 are under investigation. No cases have been detected in returned travellers in hotel quarantine.
There have been no deaths reported since yesterday. To date, 22 people have died from coronavirus in Victoria.
Of yesterday's new cases that have already been linked to outbreaks, the breakdown includes:
Other cases include:
Stage 3 "Stay at Home" restrictions came into force across metropolitan Melbourne and the Mitchell Shire overnight and will stay in force for six weeks.
"These restrictions have become necessary because of the sharp increase in cases," said Victoria's Chief Health Officer Brett Sutton.
"If you live in these areas, there'll be only four reasons to leave your home: shopping for food and essential items; care and caregiving; daily exercise; and work and study, if you can't do it from home.
"This Stay at Home direction will apply to your principal place of residence - which means you need to stay home and not use a holiday home.
"Restaurants and cafes will return to takeaway and delivery services only, and beauty and personal services will need to close. Entertainment and cultural venues will need to close. Community sport will also stop.
"These are tough measures but this virus is not selective - it will impact anyone it encounters, and personal contact is the clear source of its transmission. We need everyone to do their part and ensure it is stopped in its track
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