Premier Daniel Andrews has announced an easing of restrictions for metropolitan Melbourne on Thursday, given the state is set to reach its 70 per cent first dose vaccination target.
Mr Andrews had already committed to allowing an extra hour of exercise, expanding the travel limit from five kilometres to 10 and reopening communal gym equipment and skate parks once the target is reached.
However, small outdoor gatherings will also be allowed from Friday for vaccinated or partially vaccinated Melburnians.
The government's roadmap out of lockdown, outlining the state's restrictions through to November, will be released on Sunday.
It comes as Victoria recorded 514 new locally acquired coronavirus cases on Thursday, with 148 linked to existing outbreaks and the source of 366 infections still under investigation.
It is Victoria's highest daily tally since the peak of the state's second wave in August 2020 and the new infections bring the total number of active cases in the current outbreak to 4370.
The number of intensive care patients is also at its highest since August last year, with 44 people in ICU and 23 on ventilators, out of 173 COVID-19 patients currently in hospital.
But the Australian Medical Association's Victorian branch has said it is "reckless" for restrictions to ease until two weeks after 80 per cent of people aged over 12 are fully vaccinated.
"COVID-19 is putting unprecedented strain on Victoria's healthcare system and now is not the time to open up," Victorian AMA President Dr Roderick McRae said in a statement.
"AMA Victoria understands the implications of its policy but there are no simple solutions related to the management of COVID-19.
"This is simply the least bad option."
He also said the AMA supported mandatory vaccination of all healthcare workers and those who work in service industries.
In the 24 hours to Thursday, 61,961 tests were processed and a record 41,758 Victorians received a vaccine dose at state-run hubs.
Meanwhile, Ballarat residents are waking up under the same restrictions as Melburnians - with the exception of a curfew - after four new cases were detected in the region.
Testing is being ramped up in Ballarat to combat the cluster, while thousands of additional vaccine doses will also be sent to the Victorian gold rush town.
Chief Health Officer Brett Sutton said the seven-day lockdown will give the city "the best chance of opening up again in the shortest time possible".
In contrast, the city of Shepparton to Melbourne's north has come out of lockdown after a local outbreak of the Delta variant was brought under control.
Meanwhile, public transport to and from Melbourne's CBD will be suspended for six hours on Saturday to thwart an anti-lockdown protest.
Opposition Leader Matthew Guy said he did not condone breaking the law and called on people not to attend the protest.
But he described the public transport shutdown as"heavy-handed", given it would disadvantage essential workers.