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A regional Victorian city is going into a seven-day lockdown, as the chief health officer warns the state's latest COVID-19 outbreak is yet to reach its peak.

Victoria recorded 423 new COVID-19 cases and two deaths on Wednesday, including four infections linked to the city of Ballarat, about 120 kilometres west of Melbourne.

The new cases in Ballarat, as well as multiple wastewater detections in the region that have not been accounted for, has prompted the city's return to lockdown.

From 11.59pm on Wednesday, Ballarat residents will be under the same restrictions as Melburnians, with the exception of a curfew.

By contrast, the city of Shepparton, north of Melbourne, comes out of lockdown at 11.59pm, with its restrictions to mirror the rest of the regions, after a local outbreak of the Delta variant was brought under control.

"It's great news for Shepparton, not so great for the people of Ballarat," Premier Daniel Andrews told reporters on Wednesday.

"If we allow it to get away in one part of regional Victoria, it becomes a threat and a risk to all of regional Victoria. We simply can't have that happen."

COVID-19 Commander Jeroen Weimar said testing would be ramped up in Ballarat, while thousands of additional vaccine doses would be sent to the area.

Chief Health Officer Brett Sutton said the lockdown would give the city "the best chance of opening up again in the shortest time possible".

However, Professor Sutton warned the state's latest outbreak, which is largely concentrated in Melbourne's northern and western suburbs, had not reached its peak.

"The modelling and everything we know in relation to our current vaccination coverage would suggest that cases will continue to increase," he said.

He said while the state's COVID-19 cases "seems to have stabilised" in recent days, "the risk of getting to 1000 (daily infections) is real".

"We have to press on with vaccinations at the fastest possible rate," Prof Sutton said.

The state's two deaths are Martin Blight, a 46-year-old call centre worker from Whittlesea, and a Wyndham man in his 70s. They bring the toll from the current outbreak to eight.

Mr Blight contracted the virus at his workplace, Serco in Mill Park, and died in hospital on Monday, two days before he was due to be vaccinated.

The premier said Mr Blight was "an otherwise healthy person" and warned "there will be hundreds and hundreds of stories just like his" if Victoria opened with half the state not yet fully vaccinated.

The state government has committed to giving Melburnians more freedoms, including an extra hour of exercise and an expanded travel limit, once 70 per cent of those eligible have received their first dose.

This is was initially forecast to happen on September 23 but Mr Andrews said the target could be reached as early as Thursday.

He said some rules might be relaxed as early as Thursday night.

The roadmap out of lockdown, outlining the state's restrictions through to November, will be released on Sunday.

Opposition Leader Matthew Guy issued a media release on Wednesday morning in which he criticised the government for "stringing the community along for another week" and called for an immediate end to lockdown.

Mr Guy later clarified he meant Melbourne's 9pm to 5am curfew.

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A regional Victorian city will be plunged back into lockdown for a week due to a rise in cases, while another regional town will come out of lockdown.

From 11.59pm on Wednesday all Ballarat residents will be under the same restrictions as Melbourne except for the curfew for seven days after four cases, multiple exposure sites and wastewater detections in the area.

Meanwhile, Shepparton will come out of lockdown, with its restrictions to mirror the rest of the regions from midnight on Wednesday after a local outbreak was brought under control.

Victorian Premier Daniel Andrews acknowledged the "mixed news" for regional Victoria.

"It's great news for Shepparton, not so great for the people of Ballarat," he told reporters in Melbourne.

"If we allow it to get away in one part of regional Victoria, it becomes a threat and a risk to all of regional Victoria. We simply can't have that happen.

"Shepparton shows you that a community can be locked down, can stick together, can be supported and deliver fundamental control of an outbreak."

Ballarat residents will have to abide by stay-at-home orders with only five reasons to leave home, visitors at homes will be banned and a five kilometre travel limit will apply.

It comes after Victoria recorded 423 new coronavirus cases and two deaths on Wednesday, as the number of total active infections climbed above 4000.

Five cases were in regional areas of Ballarat and Geelong.

Of the new cases, 149 are linked to known outbreaks and the source of the remaining 274 is under investigation.

Two deaths were also reported, a man in his 40s from Whittlesea and another man in his 70s from Wyndham, bringing the toll from the current outbreak to eight.

It is not yet known if one of the deaths is a 46-year-old man who worked at a Serco call centre in Mill Park.

Martin Blight became infected with COVID-19 after a workplace outbreak died in hospital on Monday, according to the Australian Services Union.

The union remembered Mr Blight as "a committed ASU member, a father, a friend to many" and said his family encourages everyone to get vaccinated "as soon as possible".

It's unclear whether he was vaccinated but he had a Pfizer vaccine booked in for September, according to his Facebook.

It comes as Victorians may be given more freedoms from Friday, with an extra hour of exercise and an expanded travel limit on the table once 70 per cent of those eligible have received their first COVID-19 dose.

Mr Andrews has confirmed the state's roadmap out of lockdown will be released on Sunday.

The roadmap, outlining restrictions through to November, will rely on Burnet Institute modelling of vaccination and hospitalisation rates.

However, Opposition Leader Matthew Guy has criticised the government for "stringing the community along for another week".

He called for an immediate end to the 9pm to 5am curfew, family outdoor gatherings and the return of Year 11 and 12 students for the start of term four.

In the 24 hours to Wednesday morning, 54,649 tests were processed and 41,856 Victorians received a vaccine dose at a state-run hub, with the number of active cases in the state now 4038.

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NSW has reported 1259 new locally acquired cases of COVID-19 and 12 deaths as it passes 80 per cent single-dose vaccination coverage.

Curfews from 9pm to 5am in western Sydney's 12 local government areas of concern will also be lifted immediately.

Most of NSW is locked down and police are cracking down on compliance measures as authorities battle to contain the spread of the virulent Delta strain.

Of the 12 people who died in the 24 hours to 8pm on Tuesday, there was one woman in her 30s, two people in their 50s, three people in their 60s, three people in their 70s, two people in their 80s and a man in his 90s.

It takes the toll for the current outbreak to 198.

There are 1241 COVID-19 patients in hospital in NSW, with 234 in intensive care beds and 108 on ventilators.

Premier Gladys Berejiklian on Wednesday said NSW has now surpassed 80 per cent single-dose vaccination coverage.

Significant freedoms will be restored to the fully vaccinated at 70 per cent double-dose coverage, with further freedoms - including international travel - at 80 per cent double-dose coverage.

The 70 per cent milestone is expected in mid-October.

"We know it's been a stretch. We know it's been a struggle but there's only a few weeks left before we get to 70 per cent double dose," Ms Berejiklian told reporters.

Meanwhile, Australian Defence Force personnel have joined NSW Police in the Illawarra region to help with COVID-19 welfare and compliance checks as cases of the virus increase.

Soldiers are already helping police patrol the 12 Sydney local government areas considered hotspots.

Health authorities became concerned in the Illawarra Shoalhaven Local Health District after it recorded 80 cases on the weekend and 17 more on Monday.

The coastal area includes the state's third-largest city of Wollongong.

Southern Region Commander Assistant Commissioner Joe Cassar has welcomed the arrival of troops in the Illawarra, saying they would make visits on those self-isolating.

Additionally, the future of southwest and western Sydney will be debated during a two-hour economic recovery summit hosted by the NSW opposition on Wednesday.

A nursing home in western Sydney that was the scene of a COVID-19 catastrophe last year has also been locked down after another virus scare.

A Nepean Blue Mountains Local Health District spokesperson said a doctor who visited three residential aged care facilities in the area while potentially infectious has tested positive for COVID-19.

The doctor was fully vaccinated and wore a surgical mask when he visited SummitCare, Anglicare Newmarch House and Mountainview.

© AAP 2021