Victorians can welcome more guests into their homes or at weddings and return to sports events as COVID-19 restrictions are stripped back in time for the school holidays.
The raft of new measures will take effect from 11.59pm on Thursday and remain in place for the next fortnight, allowing people to plan their winter break with certainty.
"We are taking some big steps forward so we can spend more time together with the people we love," Acting Premier James Merlino told reporters on Wednesday.
Under the changes, Melbourne and regional Victoria are moving to almost identical rules including changes that allow 15 visitors into homes.
Up to 50 people will be able to gather outdoors statewide, while the cap on funerals and weddings has been boosted to 300 guests.
Hospitality venues can soon serve up to 300 patrons with no group limits as well, and live music and clubbing venues can increase capacity.
But dancefloors remain banned across all settings, including for wedding bridal parties.
Asked if he expected people to thumb their nose at the edict, Chief Health Officer Brett Sutton said: "We always hope that people do the right thing."
With a bumper weekend of sports events on the calendar, fun-starved Victorians can return to Melbourne stadiums with half-capacity crowds up to 25,000 people.
It opens the door for some 15,000 spectators to attend Saturday's A-League grand final at AAMI Park and 5000 fans to watch game three of NBL grand final series at John Cain Arena on Friday night.
Theatres can also open at 50 per cent capacity, with up to 1000 people.
From July 1, subject to public health advice, theatres will move to full capacity and indoor and outdoor stadiums can increase to 85 per cent.
While masks still have to be worn indoors, metropolitan Melbourne offices can operate at 75 per cent capacity - the same limit as regional Victoria.
Melbourne gyms, many of whom complained current settings were unviable, are likely to be pleased with their new 300-person cap and class limit of 50.
It has been almost a month since the state entered a "circuit breaker" lockdown, sparked by an outbreak of the Kappa COVID-19 variant in the city's western suburbs that spread to Port Melbourne and an aged care home in Maidstone.
An outbreak of the more infectious Delta virus in West Melbourne also emerged.
Professor Sutton is targeting a return to pre-lockdown restrictions in another two weeks as ongoing outbreaks near their final clearance stages.
"That's clearly our aspiration," he said.
Victoria effectively shut its border to large parts of Sydney at 1am on Wednesday.
Authorities declared seven NSW local government areas - the City of Sydney, Waverley, Woollahra, Bayside, Canada Bay, the Inner West, and Randwick - "red zones" under the state's travel permit system.
Non-residents who have been in a red zone are banned from entering the state, while Victorians can still return but must self-isolate at home for 14 days.
Opposition Leader Michael O'Brien said the government should have provided more warning of the border closure.
"(The government) seem to literally make it up as they go along," he said.
Prof Sutton admitted the worsening Bondi outbreak factored into the decision to hold back on some restrictions for another two weeks.
"But, by and large, these settings relate to the epidemiology in Victoria; the greater confidence we're getting each and every day with no community exposures, and the high testing numbers," he said.
Victoria had its second-straight day with no new local coronavirus cases on Wednesday, while one new infection was recorded in hotel quarantine.
More than 28,200 test results were processed during the same period and over 17,200 Victorians received a vaccine dose at state-run hubs.
Australian Associated Press