Victoria has recorded 1420 new locally acquired Covid-19 cases and the deaths of 11 more people with the virus.
It is the highest daily death toll of the state's third wave, and takes the number of fatalities of this outbreak to 68.
The fatalities ranged in age from a man in his 50s to two women in their 90s.
The new cases were found from 71,451 test results processed on Tuesday.
It comes a day after a record-high daily tally of 1763 new infections was reported, the highest for any jurisdiction in Australia since the pandemic began.
"It is probable that ongoing transmissions from cases generated via the superspreading events related to grand final gatherings have likely contributed to the notable increase," the health department said yesterday.
The banned social gatherings have been linked to the spread of the virus into more pockets of the state.
While the bulk of the infections are still centred around hotspot suburbs in Melbourne's north and west, outbreaks there have begun stabilising while infections have surged in the south-east.
Four students from the north and west who sat the General Achievement Test (GAT) yesterday have returned positive test results, the health department confirmed.
Epidemiologists and health authorities also previously warned there could be a risk from the protests against lockdowns, vaccination mandates and construction shutdowns that erupted in the state a fortnight ago.
Construction union boss John Setka told ABC News Breakfast "dozens" of people were now infected with Covid-19 in a cluster linked to a protest outside the CFMEU offices in late September.
NSW and ACT risk downgraded
Victoria has been recording more than double the number of new infections than New South Wales for about a week now.
Strict border controls had remained in place for people wanting to enter Victoria from across the border, but the rules will relax for many areas from 11:59pm tonight.
New South Wales recorded 594 new community Covid-19 cases and 10 deaths in the 24 hours to 8pm last night.
The fatalities are a person in their 40s, one person in their 60s, four in their 70s, two in their 80s and two in their 90s.
ACT has recorded 28 new cases and one further death. More than 95 percent of people in Canberra have had one dose of the vaccine, while 66 percent are now fully vaccinated.
Red zones in NSW and the ACT, which are areas not in lockdown, will be downgraded to orange zones under Victoria's traffic light border permit system.
Residents and non-residents will now be able to apply for a permit to enter Victoria with the requirement to be tested and quarantine until they receive a negative result.
"Extreme risk zones", which meant even Victorians could not return home, will be downgraded to red zones.
Under the change, it means Victorians can apply for a permit to quarantine at home for 14 days after returning to the state.
"The risk continues to be mitigated in New South Wales," Health Minister Martin Foley said.
State still days or weeks away from peak
The Burnet Institute modelling behind the roadmap out of lockdown projects a seven-day average peak of between 1400 and 2900, to be hit towards the end of October.
The seven-day average of new cases is now 1407, meaning the state is already in the lower end of the projected range.
Leading epidemiologist Sharon Lewin, from the Doherty Institute, said it could be days before new case numbers started to fall as vaccination levels increased.
"I think we're still seeing the leftovers from that [AFL Grand Final] weekend where there was a lot of mixing and potentially people delaying getting tested and I think we most likely won't see numbers coming down until next week," she told RN Breakfast.
Hospitalisations are projected to rise alongside new cases - something which has led to fears about the state's healthcare system, which is already straining under the pressure of the pandemic.
There are 525 people hospitalised with Covid-19 in Victoria, including 94 in intensive care and 53 people on a ventilator.
Of those in hospital, only 6 percent were fully vaccinated.
The new cases take the number of active infections in the state to 14,410.
But the state remains on track to lift lockdown once 70 percent of people aged 16 and older have received both doses of a Covid-19 vaccine, then grant more freedoms at 80 percent double dosed.
Premier Daniel Andrews yesterday said he had not received any health advice to suggest the roadmap would need to be altered.
However, he has not ruled out making changes if he receives advice to do so.
State and Commonwealth vaccination figures differ slightly, but indicate about 83 percent of Victorians aged over 16 have received at least one dose of vaccine and around 54 percent are fully vaccinated.
- ABC