COVID-19: Melbourne's strict lockdown restrictions to be eased after no new cases

A lockdown of Australia's second-biggest city will be eased after the country's coronavirus epicentre went 24 hours without new infections for the first time in four months, Victoria state Premier Daniel Andrews said on Monday.

Melbourne - home to 5 million people - has been in lockdown since early July after a spike of COVID-19 infections began in quarantine hotels for new arrivals.

But with infections now under control, Andrews said most restrictions would be eased in two phases starting from midnight, which should give Australia's ailing economy a boost.

"Now is the time to open up," Andrews told reporters in Melbourne.

"We have been able to bring this under control, a day of zero cases is an amazing achievement."

Andrews said people would be free to leave their homes from Tuesday while restaurants, cafes, shops, bars and hotels would be allowed to re-open.

Capacities at those businesses, however, will be capped at 40 indoors and 70 outdoors.

The number of guests at weddings, funerals and religious services are set to be expanded, with outdoor sport also to resume.

Andrews said people would be allowed to make the journey from Melbourne to Victoria's regional areas from November 9, when a curb limiting people from travelling no further than 25 kilometres from their homes will be dropped.

Speaking to The AM Show on Tuesday, senior Sunrise reporter Nathan Templeton said Melburnians are celebrating the welcome news - including the Premier.

"It's going to allow people to reconnect with each other and socialise a bit more, which is very important," he said.

"People have been really suffering through all of this, for business it is so important... this gives them some sort of chance to try and recover."

On Monday evening, a masked Andrews shared a picture of a celebratory doughnut to his Twitter, captioning it: "Today's a good day."

It's hoped the easing of restrictions will contribute to a quick economic rebound from Australia's first recession in three decades, triggered after large swathes of the economy were shut to slow the spread of the virus.

The economy shrank 7 percent in the three months to the end of June, the biggest quarterly contraction since records began in 1959. Unemployment hit a 22-year high of 7.5 percent in July as businesses and borders closed.

Most restrictions in other parts of Australia have been eased, with just a handful of locally acquired infections being found on most days.

Australia has recorded just over 27,500 cases of COVID-19, far fewer than many other developed countries.

Victoria, which accounts for more than 90 percent of the 905 deaths nationally, did not record any new deaths from the virus in the past 24 hours.

Reuters