Victoria has recorded 42 new coronavirus cases and eight deaths as police prepare to crack down on regional travel.
Regional Victoria will return to Stage Two restrictions at 11.59pm on Wednesday, but Melbourne will stay in its Stage Four lockdown.
Authorities are ramping up roadblocks, creating the so-called 'ring of steel' around Melbourne to ensure city residents do not try to take advantage of the eased regional measures.
Premier Daniel Andrews has warned motorists travelling out of the city to expect longer wait times as police tighten checkpoints.
A man wearing a mask walks past street art in Prahran in Melbourne on September 14
Locals wearing face masks walk along the South Melbourne Beach on Monday. Lockdown restrictions in regional Victoria will be lifted from tomorrow
Cyclists are seen riding at Albert Park on September 9, in Melbourne, Australia
'I'm sorry to say it will mean that there will be significant queues, there will be travel issues,' he told reporters on Tuesday.
Outdoor gathering limits in regional parts of the state will increase to 10 people from midnight on Thursday morning - as will weddings and outdoor religious gatherings.
Funerals will be allowed 20 mourners and regional Victorians can welcome five visitors from another nominated household.
Melbourne's lockdown rules remain unchanged and people cannot travel out of the city without specific reasons.
The next step for regional Victoria means pubs, cafes and restaurants will be able to serve people outside with strict density quotas, while outdoor gathering limits will be upped to 10.
Regional Victorians will also be able to leave their homes without restriction and all shops can reopen.
The premier said Melburnians should be inspired by the rolling back of restrictions, rather than disheartened.
'I'd encourage people not to see it that way and instead see this as proof positive,' he said.
Masked walkers on South Melbourne Beach on Monday as the world's heaviest coronavirus restrictions in the city were eased overnight to allow residents two hours exercise time
A pedestrian wearing a face mask walks past a closed pub in Melbourne on Thursday. Mr Premier Daniel Andrews announced $100million will go towards a Melbourne City Recovery fund to inject life back into the city
The move comes after Mr Andrews was heavily criticised for a $290million plan to revive the state's crippled entertainment sector.
The under-fire premier unveiled a funding package on Monday to help the state's sole traders and entertainment industry survive when COVID-19 restrictions are lifted.
Mr Andrews said the plan would turn the city into an al fresco dining hub - but the head of Melbourne's largest restaurant group has already labelled the proposal unworkable.
'The government thinks this is going to be some sort of outdoor Disneyland for dining, but it's not going to work,' Luca Restaurants chief executive Chris Lucas told the Herald Sun.