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Metropolitan Melbourne and Mitchell Shire Council will return to stage three restrictions for six weeks as of midnight Wednesday, Premier Daniel Andrews has announced.
Hospitality businesses will return to takeaway only, visitors will not be allowed at homes and public gatherings will be limited to two people.
“These are unsustainably high numbers of new cases,” Mr Andrews said.
It would be “impossible” to continue contact tracing and suppressing the virus at this current rate of infection and "tragedy" would ensue, he said.
“If we would fail to take these steps it would be a couple hundred [cases], it would be many more than that and it would quickly spiral out of control.
“We have to be realistic … this is not over.
"A sense of complacency has crept into us ... each of us know someone who has not been following the rules as well as they should have.
“We have the chance to change that, in the decisions we make and how we conduct ourselves.”
People will not be allowed to leave home unless for essential reasons including medical and caregiving, shopping for essential items, work and study and exercise.
Retail businesses will remain open subject to density limits, markets will be for food and drink only and hairdressers will remain open.