Regional Victoria's coronavirus restrictions will ease on Wednesday night, Premier Daniel Andrews has confirmed.
He made the announcement as Victoria enjoyed its first day without a coronavirus death since July 13.
That leaves Victoria's toll at 729 and the national figure on 816.
The state also had 42 new cases.
"I am absolutely delighted to be able to announce that regional Victoria, from 11.59pm (local time) tomorrow night, will be able to take the third step in our safe and steady road map to Covid normal," Mr Andrews said.
"It's a massive thing. It is such good news."
Key features of the eased restrictions include outdoor gathering limits being increased to groups of 10, plus hospitality and entertainment will be allowed.
People in regional Victoria will also be able to leave their homes without restriction.
Mr Andrews said the step was being taken because there were less than five coronavirus cases for a 14-day period in regional Victoria, plus no mystery cases.
The 14-day new case average for Melbourne has dropped to 52.9 and it is 3.6 for regional Victoria.
But there are no immediate changes to Melbourne's lockdown rules and people cannot travel out of the city without specific reasons.
Mr Andrews said more vehicles would be stopped at police checkpoints out of Melbourne and he warned there would be long queues as a result.
It came as the Victorian government unveiled a multi-million dollar package to transform footpaths and streets into open-air dining areas after lockdown.
The $316 million package includes $109 million for sole traders who will remain closed or heavily restricted as the state begins to reopen.
Another $109 million will go towards a Melbourne City Recovery Fund to help small to medium businesses set up outdoors, fund Covid-safe events and cultural activities and make physical improvements to the city streetscape.
But the hospitality industry is unhappy with the idea, saying it will not work in Melbourne.
Under the state government's plan, Melbourne's bars, cafes and restaurants can open for outdoor dining from October 26.
It follows a $3.2 billion suite of business cash grants, payroll tax deferrals and fee waivers announced on Sunday.
Melbourne will move to its next step of reopening on September 28 if the 14-day average falls to 30-50. It is currently at 54.4.
The city took its first tentative steps out of lockdown on Monday, with those living alone or single parents allowed to have one visitor, outdoor exercise extended to two hours and curfew's start time extended an hour to 9pm.