Victorian Premier Daniel Andrews says metropolitan Melbourne will be put into a six-week lockdown after recording 191 new coronavirus infections on Tuesday.
The lockdown, which will also apply to the Mitchell Shire north of the city, will take effect from 11.59pm on Wednesday.
Mr Andrews told reporters on Tuesday new infections would quickly spiral out of control if drastic suppression measures weren't put in place.
"These are unsustainably high numbers of cases," he said.
"It is simply impossible with case rates at this level to have enough contact tracing staff, to have enough physical resources, no matter where they come from, no matter what uniform they wear, to continue to suppress and contain this virus without taking significant steps."
Mr Andrews said a sense of complacency had plagued Victoria in recent weeks.
"I think each of us know someone who has not been following the rules as well as they should have," he said.
"I think each of us know that we've got no choice but to take these very, very difficult steps.
"It was a long night and we have been working throughout the day to get all the data we possibly could to make the best evidence-based science-based decision about what the next steps should be."
He said the state needed to take the outbreak as seriously as it would a bushfire emergency.
"This is binary. It is life and death. There are people across the world who have died who are otherwise healthy - not one or two. Significant numbers."
Of the 191 new cases, 13 have been linked to the nine Melbourne public housing towers in hard lockdown.
Mr Andrews said authorities were planning to lift the lockdown of those public housing towers once they had finished testing residents.
"The strategy here is to complete the testing and then as soon as possible, once that testing is complete, to have those nine towers moved to the same footing that the rest of Melbourne will move to."
The number of new cases is up from the previous record set yesterday when 127 new cases were confirmed.
Chief Health Officer Professor Brett Sutton acknowledged the lockdown was "awful but necessary".
"It's painful to have to say it and go through it and to flag we've got six very difficult weeks ahead of us," Dr Sutton said.
"But we have been through this before and we did it successfully. There is a unanimous view this is to avoid catastrophic outcomes."
There are currently 772 active cases in Victoria.
The spike in infections comes as NSW moves to lock down the border with Victoria in an effort to prevent the outbreak from spreading.
About 650 police officers will be dispatched to patrol the closed border from midnight on Tuesday and another 350 defence personnel will be in place by the weekend.
Troops will support police operations without directly involving themselves in law enforcement activity.
Children from a window inside a unit at the public housing tower along Racecourse Road in Melbourne. Source: AAP
Four new cases related to an outbreak among emergency department staff at Northern Hospital Epping, which now totals eight staff and one household contact.
The emergency department remains open with a temporary reduction in non-urgent elective surgery and outpatient appointments.
A new case has also been confirmed in a staff member at the Assisi aged care facility in Rosanna, in Melbourne's northeast.
The staff member did not work while infectious and widespread testing of staff and residents at the facility will begin on Tuesday.
Residents in affected public housing towers who need access to support and assistance should call the Housing Call Centre on 1800 961 054. If you need a translator, first call 131 450. Both services are 24/7. More information can be found .
People in Australia must stay at least 1.5 metres away from others. Check your state’s restrictions on gathering limits.
If you are experiencing cold or flu symptoms, stay home and arrange a test by calling your doctor or contact the Coronavirus Health Information Hotline on 1800 020 080.
