Victoria has recorded its deadliest day of the pandemic, with 17 more fatalities across the state and 394 new cases.
The previous highest daily death toll was 15 fatalities on August 5.
The deaths include two men in their 50s, four men in their 70s, four women and two men in their 80s and two women and three men in their 90s.
Ten of the 17 deaths have been linked to outbreaks in aged care.
"To each of those families, we send our sincere condolence, our sympathies, our best wishes," Premier Daniel Andrews said.
"This will be an incredibly difficult time for them and I want them to know that they are in our thoughts and prayers as we continue to do everything we possibly can to deal with this second wave and to get beyond it."
There are 634 Victorians in hospital, 43 of whom are in intensive care and 26 of whom require a ventilator.
NSW has recorded 10 new Covid-19 cases in the 24 hours to 8pm last night.
That brings the state's total to 3672.
Of the new cases, one is a returned overseas traveller, seven were locally acquired and are close contacts of known cases and two are under investigation with no known links.
Virus is a 'wicked, silent enemy'
Premier Andrews has labelled Covid-19 a "wicked, silent enemy", warning Victorians they will have no chance of driving down case numbers without the state's tough restrictions.
"These are heartbreaking decisions to make. These are very challenging settings to put in place. But unless we do this, this second wave will not end anytime soon," he said.
"If we don't limit movement, if they don't follow the rules, we, as a state, have zero chance of driving down these numbers. It won't happen by accident. It won't happen because of good fortune. It won't happen because of the passage of time. We need to make these decisions."
Andrews said there was no other way to stop the virus spreading within the community.
"There's just no alternative. This virus is a wicked silent enemy, and it will only be defeated if we have a united front against it, and that is about everyone making the best choices," he said.
Premier addresses virus surge
Victorians have been warned they will be living under Covid-19 restrictions longer than they should be if people continue to flout the rules.
Premier Andrews said the coronavirus crisis was "a fight" the state had never experienced before.
"This is a fight the likes of which we've never been engaged in. But we overcome. We overcame fire. We overcame drought. We overcome lots of challenges. We are a resilient people," he said.
"This could not be more serious. This is a challenge, a fight, a battle, the likes of which we have never experienced before. And unless all of us, to the best of our ability, make the right choices, then we'll be in this longer than we should be."
Andrews praised the Victorians who were doing then right thing, but said there would always be a percentage of people who "make consistently bad choices".
"Victoria police are out there and the fines are higher than they were. The best part of $5,000. And if you're really just flouting the rules, then there are other options to take you to the Magistrates Court and the fines get substantially bigger," he said.
Premier hesitant to label lower cases a trend
Andrews has held off labelling today's lower daily case numbers a sign the state in suppressing the virus.
"We've avoided tens of thousands of cases and therefore, death rates that would have been substantially higher. But I'm always wary to try to take one day's data and turn that in a trend," he said.
"What we have to do is all of us acknowledge that the only way this strategy works is if everyone follows the rules, everyone acknowledges that whether we like it or not, we are in this together unless everybody plays their part. "
Andrews said the only way the state would drive numbers down is if everyone plays their part and follows restrictions.
"Obviously, any day where there's less cases than the previous day is a good one. But I wouldn't want to be trying to predict, I wouldn't want to take one day's data or even a week's data," he said.
"The other point to make is that we have had only a couple of days of the stage 4 settings.
"In fact, some of them don't actually kick in until midnight tonight. So we're probably seeing the tail end of the stabilisation that was the product of the stage 3 rules."