Premier Daniel Andrews said it was "a good day ... where Victorians can be proud of the work that they've done, their commitment, their resolve to see this off".
He still wanted to see numbers get lower, and urged Victorians to stay the course.
"This is a day of hope and optimism," Mr Andrews told reporters. "A day that, beyond any doubt, this strategy is working and we will get to that COVID normal.
"It will be meaningful and sustainable, it will be able to be locked in. We're not going to spend 2021 undetermined."
However there were five more deaths, all linked to aged care outbreaks. They include two men and two women in their 80s and one woman in her 90s.
An outbreak in the Hallam area in south-east Melbourne has now reached 40 cases but Mr Andrews hoped they could "pull it up at that number".
He warned against pretending the outbreak was over, and stressed the importance of continuing to get tested for even the most minor symptoms.
"That's what gives us certainty, the clearest picture of where the virus is, and allows us to take safe and steady steps towards a COVID normal," Mr Andrews said.
Shortly after Mr Andrews's press conference, anti-lockdown protesters gathered in Chadstone Shopping Centre for their second planned rally of the weekend.
A small number of demonstrators gathered outside Coles and sang John Farnham's You're The Voice just after 1pm on Sunday afternoon.
Footage posted on social media showed police flooding the shopping centre at 1.15pm, by which point the protesters had already dispersed.
Organisers released details of the protest in encrypted online chat groups with only 30 minutes' notice to evade police detection.
Live music industry support package
The Victorian government on Sunday also announced support for the music industry as it looks to life beyond current coronavirus restrictions.
New initiatives include cash injections for more than 100 live music venues, grants to support jobs on stage and behind the scenes, new planning controls to better protect venues and funding for music organisations and peak bodies.
Grants totalling $9 million will help venues that have closed cover overheads, put coronavirus safety measures in place, and reopen and host events when it's safe to do so.
Creative Industries Minister Martin Foley said Victoria's live music industry was one of the first and hardest-hit sectors during the pandemic, and would be one of the last to be able to return to a new normal.
He said the support would protect grassroots venues, save jobs and music businesses and keep live music going beyond the pandemic.
Meanwhile, anti-lockdown protesters continue to challenge police, with officers on horseback chased off a group of about 100 rallying in the beachside suburb of Elwood on Saturday.
Police made 16 arrests and handed out 21 fines for breaching health directions.
The rallies are becoming a weekly occurrence, with more expected on Sunday.
A Victoria Police statement on Saturday showed patience was wearing thin, saying "the behaviour of these selfish few who choose to blatantly ignore the directions will not be tolerated".
New South Wales recorded its first coronavirus death in five weeks, with a man in his 70s dying after contracting the disease from the Sydney CBD cluster.
Queensland recorded two new cases, including a returned traveller in hotel quarantine and a known contact of a case from the corrective services cluster at Wacol.
Metropolitan Melbourne residents are subject to Stage 4 restrictions and must comply with a curfew between the hours of 9pm and 5am.
During the curfew, people in Melbourne can only leave their house for work, and essential health, care or safety reasons. Between 5am and 9pm, people in Melbourne can leave the home for exercise, to shop for necessary goods and services, for work, for health care, or to care for a sick or elderly relative. The full list of restrictions can be found here.
All Victorians must wear a face covering when they leave home, no matter where they live.
People in Australia must stay at least 1.5 metres away from others. Check your state’s restrictions on gathering limits.
If you are experiencing cold or flu symptoms, stay home and arrange a test by calling your doctor or contact the Coronavirus Health Information Hotline on 1800 020 080. News and information is available in 63 languages at https://sbs.com.au/coronavirus