Victoria has recorded 317 new coronavirus cases in the past 24 hours - marking Australia's worst daily increase in cases yet - and two more deaths.
The state's previous record was on Friday when 288 new cases were recorded, which was the worst daily increase of any state or territory since the pandemic began.
Premier Daniel Andrews says Victoria is aiming to eliminate community transmission entirely in the next five weeks.
"If a suppression strategy can deliver an effective defeat of this thing, when we have eliminated it to a point we have zero cases, it's a terrific by-product of delivering the current strategy," he said.
"I said we're essentially in the midst of trying to establish whether we can suppress and not have multiple waves. That's the real time work we're doing now.
"But you've got to order your thinking and order the work you do. And the most important thing at the moment is to have that sense of control, drive those numbers down, see community transmission at but a fraction of the rate it's running now."
Andrews said the lockdown's full impact was not yet apparent.
"It will take some time to bring that stability to the numbers and then of course to start to see a pattern where they are driven down."
Victoria has moved to increase its available hospital beds.
The Government had planned to restore hospitals to normal medical services by the end of July before infections began to rise in recent weeks.
Instead, Victoria responded to the latest spike by reducing numbers of non-urgent surgeries allowed in hospitals to increase beds available for Covid-19 patients, Health Minister Jenny Mikakos said.
Two men in their 80s died in Victoria in the last 24 hours, bringing the national death toll during the pandemic to 113.
"It's a big number. It needs to turn around," Victoria Chief Health Office Brett Sutton said of the 317 new cases. "In some ways, I expect it to turn around this week. But as I've always said: it's no guarantee. It's upon all of us to be able to turn this number around."
Given the week the lockdown has been in effect, the incubation period of the virus and the time for cases to be confirmed and counted, "we would really expect a plateauing in the next couple of days," Sutton said. "But we cannot be complacent and expect that's going to happen automatically."
Authorities say Sydney's new cases are becoming infectious just one day after contracting the virus. It normally takes up to 14 days for coronavirus to start showing effects on the body.
New South Wales Health Minister Brad Hazzard says the city is "effectively in a war zone" after ten cases were linked to the Crossroads Hotel cluster yesterday – bringing the total number of known infections to 34.
The state's Chief Health Officer Dr Kerry Chant said several of the cases had developed their Covid-19 symptoms incredibly fast. She said Sydney's new cases appear to show symptoms after just one day.
"It gives you very little time for the contact tracers, because you've got to get your cases diagnosed and then you've got to lock down those contacts," Chant said.
Australia has recorded a total 10,305 cases of Covid-19, with 4448 in Victoria, 3328 in New South Wales, 1071 in Queensland, 443 in South Australia, 644 in Western Australia, 228 in Tasmania, 113 in the Australian Capital Territory and 30 in the Northern Territory.
- additional reporting AP