Face masks will no longer be required outside in Victoria from midnight, as long as physical distancing can be maintained.
Victorians will still need to wear face masks indoors, and carry them outdoors in case they cannot physically distance.
"If you go to Bunnings and you are inside the store, you are wearing a mask. If you are in the car park, you do not have to wear your mask," Premier Daniel Andrews said.
"But if you are queueing up for a sausage, and you are with other people, and you are simply not keeping a distance - you are part of a crowd, you need to put the mask on."
Masks remain mandatory on public transport.
The relaxed rule is among a series of restrictions being eased as Victoria enters the final step of its "roadmap" towards Covid normal.
Victorians will be able to have up to 15 visitors to their homes per day from tomorrow, and the limit on outdoor gatherings will increase to 50 people.
Indoor venues like cinemas, art galleries and museums will be able to host up to 150 people indoors.
The number of patrons allowed indoors at large hospitality venues will increase to 150, with total venue capacity capped at 300 - subject to a density quota of one person per four square metres in larger venues.
But for smaller hospitality venues, the density limit has been relaxed to allow one person per two square metres, with a limit of 50 customers.
Adult contact and non-contact sport will also be allowed to start up again.
For indoor sports there will be a limit of 150 people and a group size of up to 20, while outdoor sports can have up to 500 people in groups of up to 50.
Andrews has also announced that Victorians will be allowed to have up to 30 visitors to their home per day by Christmas. That change will come into effect on 13 December.
Health boss confident of no community transmission
Victoria today recorded its 23rd straight day of zero new coronavirus cases and infections.
Chief health officer Brett Sutton said while elimination "may or may not be the right word" for the state's status, he was confident community transmission was no longer occurring.
"We have not got into the epidemiological threshold of 28 days yet, but I'm confident we will get to that," he said.
However, he said people should remain mindful of health measures like physical distancing and hand hygiene as an "insurance policy for any incursion that may happen in the future".
"We have seen a big outbreak in South Australia," Professor Sutton said. "That could have been much bigger if it hadn't been picked up at the early stage.
"That will be an ongoing risk until there is really substantial rollout of the vaccine across the world."
Andrews said two weeks from now, on 6 December, he was hoping to announce the next series of changes to Victoria's rules.
"I think that would be the last changes this year, and we would lock those in," he said.