The public housing blocks are being locked down for at least five days for testing, affecting 3000 residents and monitored by 500 police.
The affected public housing tenants will not be charged rent for the next two weeks, Mr Andrews announced on Sunday.
Tenants who are employed will also receive a $1500 hardship payment to compensate for missing work, while tenants who are unemployed will receive a $750 hardship payment.
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Mr Andrews acknowledged that the lockdown will not be a pleasant experience.
"This is not about punishment but protection. We cannot have this virus spread," he said.
"We have to do everything we can to contain the virus and that is why staying in your unit, staying in your flat, is absolutely essential."
The state recorded 108 new cases on Saturday, the second-highest daily tally since the pandemic began, after weeks of double-digit daily rises.
The public housing blocks are being locked down for at least five days for testing, affecting 3000 residents and monitored by 500 police, while stay-at-home orders have been issued for a further two postcodes, bringing the total number of postcodes considered hot spots to 12.
Concerns about lockdown conditions
Concerns have been raised about the conditions inside the locked-down public housing towers.
Ethnic Communities Council of Victoria chair Eddie Micallef said he was worried about the impact of the lockdown on vulnerable tenants.
"The lockdown is concerning in the sense that sometimes (you have) very small units with overcrowding," he told the ABC.
"I think more than food, the fact that they are locked down, that they are - how shall I say - restrained.
"Some of them have vulnerable people. Some of them have underlying health issues, mental health issues. The fact that their networks are outside the units, so they are feeling sort of imprisonment.
"Those are the sorts of challenges both the government and areas like the police and other support services will have to deal with in a sensitive way."
The Flemington and Kensington Community Legal Centre said in a statement that it was "extremely concerned" about the hard lockdown.
"Residents are reporting confusion, fear, anxiety and tonight have been navigating contradictory directions from police and authorities as they try to prepare for a sudden five-day highly restrictive lock down," the legal centre said on Saturday night.
"We have long called for health responses that centre care and wellbeing - not punitive responses that will result in further harms."
People in Australia must stay at least 1.5 metres away from others. Check your state’s restrictions on gathering limits.
Testing for coronavirus is widely available across Australia. If you are experiencing cold or flu symptoms, arrange a test by calling your doctor or contact the Coronavirus Health Information Hotline on 1800 020 080.
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