Victoria has enjoyed its first day without a coronavirus death since July 13.
The state also had 42 new cases.
The good news leaves Victoria’s toll at 729 and the national figure on 816.
There should be more good news this week, with regional Victorian restrictions set to ease.
The 14-day new case average for Melbourne has dropped to 52.9 and it is 3.6 for regional Victoria.
Premier Daniel Andrews has flagged regional Victoria may move to the “third step” of its roadmap plan as early as this week.
That step, allowing people to leave their homes without restrictions and hospitality businesses to reopen, is triggered if its 14-day average remains below five and no “mystery” cases are recorded.
“There won’t be a lot of notice,” Mr Andrews told reporters on Monday.
“That is preferable in making people wait for another week or so.
“Hopefully we can have very good news for regional Victoria tomorrow.”
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 $290 million package includes $100 million for sole traders who will remain closed or heavily restricted as the state begins to reopen.
Another $100 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.
Under the state government’s plan, Melbourne’s bars, cafes and restaurants can open for outdoor dining from October 26.
It follows a $3 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.