Victoria State Premier Daniel Andrews said the restrictions would be in place until 28 September, with a slight relaxation.
A gradual easing of the measures will be implemented from October.
The state has been the epicentre of the country’s second wave, accounting for 90% of Australia’s 753 deaths.
Australia has recorded a total of 26,000 cases in a population of 25 million.
The greater Melbourne area entered a second lockdown on 9 July after a rise in cases. A 5km (3 mile) travel limit and night time curfew was imposed while shops and businesses were closed.
The current stage four lockdown was originally set to end on 13 September.
Melbourne’s curfew will be expanded from 21:00 to 05:00. Single people will be allowed to form a bubble and visit each other, and the current travel limit will not apply to these meetings.
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