The state government on Monday announced the rapid tests will be rolled out to up to 20 outbreak-stricken schools, before broader distribution to all schools.
The tests, which are approved for use at home by the national medicines regulator, will be offered to unvaccinated students deemed primary close contacts of a positive case at school.
It will allow students to return to face-to-face learning after seven days in isolation, rather than 14.
But they will still need to provide a negative PCR test on day six, and return a negative rapid test before school from days eight to 14 after exposure.
The program will operate on an opt-in basis from November 15 and fully-vaccinated children will not participate as they are only required to quarantine for seven days.
Education Minister James Merlino said children currently make up one-in-three primary close contacts across the state, with those under 12 still ineligible to get a vaccine.
"That means that there is significant disruption for students and their families when they're identified as a primary close contact at school," he told reporters at Jells Park Primary School in Wheelers Hill.
"For all of our unvaccinated and partially-vaccinated students, they'll be able to return to school a week earlier than has been the case."
It comes after Victoria recorded 1126 new cases and five deaths as tourism and business industry groups hail a plan to coax visitors back into downtown Melbourne.
The health department confirmed the state is managing 16,178 active cases.
There are 556 Victorians in hospital, of whom 91 are in intensive care including 54 on ventilators. The seven-day hospitalisation average has fallen by 20 to 628.
Another 44,479 tests were processed on Sunday and 8337 vaccines administered at state-run hubs.
About 84 per cent of people over 12 are fully vaccinated.
The Victorian government and City of Melbourne on Sunday announced they would jointly fund initiatives to bring the city centre back to life after its sixth lockdown, including a $5 million midweek dining rebate scheme.
AAP with The Project