Victorian Premier Daniel Andrews has announced a lockdown of metropolitan Melbourne as the state records its largest daily increase in Covid-19 cases since the start of the pandemic.

Stay-at-home orders have been reintroduced for both Melbourne and the shire of Mitchell - placing those areas back into Stage 3 restrictions from midnight tomorrow.

The state reported 191 new cases of Covid-19 today, with 37 linked to known outbreaks and the remaining 154 still under investigation.

Andrews announced the stay-at-home orders would be reimposed from midnight tomorrow night.

Andrews said the new restrictions were the result of the "unacceptably" high number of new cases.

The Mitchell Shire, north of Melbourne, includes the towns of Broadford, Kilmore, Seymour, Tallarook, Pyalong and Wallan.

Under the stage three restrictions, people are only allowed to leave their homes for four main reasons: work or study, exercise, shopping for supplies and medical care and caregiving.

Andrews had already imposed stage three stay-at-home orders on 12 postcodes covering 39 Melbourne suburbs.

Nine public housing towers were also under even more strict "detention orders", forbidding 3000 residents from leaving their homes.

Meanwhile, the NSW-Victoria border is closing at midnight, and about 1000 police officers and soldiers from NSW were making their way towards the state line to help close crossings.

NSW Police Commissioner Mick Fuller conceded the first 72 hours of the closure would need to be flexible, because specific details about who could get an exemption to travel due to "extraordinary circumstances", and exactly how border communities would operate, had not been revealed.

NSW Police Minister David Elliott said Victoria should do the "decent thing" and help pay for the cost of closing the border between the two states.

Elliott said it was a costly exercise and Andrews should foot part of the bill.

"I would think that would be the decent thing to do, given this is an outbreak that's caused by a situation in Melbourne," he said.

"But we can't rely on other governments to do the right thing all the time.

"So as far as the New South Wales government is concerned, we'll be providing the financial support that's necessary.

"Obviously with the defence aid, that comes within each individual agreement, the application that's made."

- ABC