The state recorded a further 18 COVID-related deaths and 34,836 new cases on Friday, including 15,440 from rapid antigen tests and 19,396 from PCR tests.
With 239,396 active cases across the state, the number of patients with COVID-19 in hospital has climbed to a record high.
There are currently 976 people in hospital with COVID-19, up 23 from Thursday, including 112 in intensive care. Thirty of those need a ventilator to breathe.
To cope with the surge, Acting Health Minister James Merlino has announced two quarantine hotels will be converted into "medi-hotels".
The Pullman on Swanston and Mantra at Epping in the city's north will provide "hospital overflow accommodation", freeing up extra beds.
"Like hospital in the home, this will alleviate some pressure on hospitals," Mr Merlino told reporters on Friday.
Emma Cassar, the commander of Victoria's dedicated quarantine agency, said the first of up to 300 patients would start arriving at the hotels from Monday.
It comes as questions linger about rapid test supply to allow more workers to be freed from isolation.
The list of workers exempt from isolating as close contacts will be broadened from midnight on Tuesday to include those in emergency services, education, critical utilities, custodial facilities, transport and freight.
Health care, food distribution, manufacturing, packaging and retail supermarket workers are already exempt, while state government project workers will not be included in the list.
Workers must first notify their employer when they become a close contact and both parties must consent to the worker returning to the workplace.
They can then only return to work if "it is necessary for continuity of operations" and will not be allowed to go out and socialise outside work.
Exempt workers must wear a face mask at all times and undertake daily rapid antigen tests for five days, with negative results before attending work, with employers expected to provide RATs to employees.
Mr Andrews said Victoria is expecting to receive about two-and-a-half million RATs from the national stockpile and has ordered another 44 million.
But the federal government did not announce any allocation of free rapid tests to states or territories after Thursday's national cabinet meeting.
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