Melbourne and some regional Victorian towns have been ordered back into lockdown for six weeks after the state was hit with a record 191 coronavirus cases.
Premier Daniel Andrews confirmed metropolitan Melbourne and Mitchell Shire, north of the city, will return to stage three lockdown from 11.59pm on Wednesday.
People will only be allowed to leave their homes to shop for food and supplies, to receive or provide care, to exercise, and to study or work if they can't do so from home.
"We know we're on the cusp of something very, very bad if we don't take these steps today," Mr Andrews told reporters on Tuesday.
He said it was "simply impossible" to continue contact tracing at a sufficient level to suppress the virus.
Chief Health Officer Brett Sutton said he wanted the state to avoid "absolutely catastrophic outcomes" including thousands of new cases and many more deaths.
"I know we will already see deaths from the cases we have occurring every day. What I do not want to see is any more deaths that are already predicted," he said.
Victoria recorded its highest number of new cases since the start of the pandemic on Tuesday, following an increase of 127 cases on Monday, which was also a record.
There are 772 active cases, up from 60 a month ago, with more than half potentially from community transmission.
The premier said a sense of complacency has crept into Victorians as restrictions eased.
"I think that each of us knows someone who has not been following the rules as well as they should have," he said.
But the government continues to come under fire for its handling of coronavirus measures, particularly the disastrous hotel quarantine program that has helped fuel this second outbreak.
Businesses and facilities that had recently reopened - including beauty parlours, entertainment venues, gyms, libraries and swimming pools - will have to close while cafes and restaurants will only be open for takeaway and delivery.
Much like earlier restrictions, visitors will no longer be welcome at homes and people cannot gather outside in groups of more than two.
Funerals will also return to 10 mourners while only five people can attend a wedding, including the couple.
Schools in affected areas will not open their doors for term three, which was due to begin on Monday.
Holidays have been extended by a week to give teachers and parents time to prepare for a return to remote learning.
Year 11 and 12 students and special schools, however, will continue face-to-face learning.
Except for Mitchell Shire - which takes in towns including Broadford, Kilmore, Pyalong, Seymour, Tallarook and Wallan - regional Victoria is excluded from the lockdown.
"Vast parts of regional Victoria have no cases. This is designed to keep it that way," Mr Andrews said, noting restrictions may ease further in the regions.
Unlike previous restrictions, people cannot travel to holiday homes, as part of efforts to keep the regions virus-free.
Meanwhile, residents in nine public housing towers in Flemington and North Melbourne will remain in strict lockdown, unable to leave their apartments, until everyone is tested.
"This is not going to last a moment longer than it needs to," Mr Andrews said.
With 69 cases in the towers so far, residents will only revert to the same lockdown as the rest of the city when testing is completed.
More than 250 additional military personnel will assist Victoria Police to keep a "hard border" around Melbourne.
Booze bus-type checks will be in place on main roads in and out of the city, while venues in areas outside the lockdown will be required to ask for ID to determine if someone is a local.
It comes as the state's border with NSW is set to close from 11.59pm on Tuesday for the first time in more than a century.
To date, 22 people have died from coronavirus in Victoria.