Three women - two in their 40s and one in her 70s - in the Melbourne suburbs of Mitcham, Hallam and Mentone have been diagnosed with COVID-19.

"It is believed there is a link to Sydney but close contact interviews are underway now," a Victorian government spokeswoman told AAP on Wednesday night.

NSW health authorities are working to get on top of growing virus clusters in Sydney and Wollongong.

Victoria's testing chief Jeroen Weimar said extensive contact tracing was underway in Melbourne, with more than 40 primary close contacts supported to isolate immediately.

More close contacts are expected to emerge.

"We have been in this position before and we are deploying our full outbreak approach around these cases," Mr Weimar said.

He added that the three women had done the right thing in getting tested.

"We always knew this virus had us in a precarious position and we need to make sure we do everything we can to stamp out any further transmissions," Mr Weimar said.

Earlier on Wednesday the Victorian government said it remained a "long way" from opening its border with NSW.

Half of the new NSW cases belong to the Sydney northern beaches cluster, while a second cluster has emerged in the city's west, along with cases in Wollongong, south of Sydney.

Victoria's Police Minister Lisa Neville said decisions about the border were being made on a daily basis but based on health advice no one was ready to contemplate changes.

"We're still a long way from that border being open," she said.

"I know we were concerned about the Wollongong spread and the case there, and that occurred I think through churches, so we'll continue to monitor this and if we need we'll extend that red zone," Ms Neville said.

Victoria on Wednesday morning marked 61 days without a local transmission of coronavirus and just one case of a returned traveller in her 20s in hotel quarantine.

There were only eight active cases, all in hotel quarantine or self-isolation, including seven international travellers and a teenage girl at home after contracting the virus in NSW.

Ms Neville acknowledged the effect the border restrictions had on local communities but said people were largely supportive.

"We all do want to say goodbye to this year, we all do hope that 2021 is a better year that we've got ahead but we don't have a vaccine," she said.

"It has been a very hard year and we have done an incredible thing as Victorians - let's not risk it as we celebrate the end of 2020."

Celebrations for the new year in Victoria will be muted on Thursday night.

Melbourne fireworks that would draw nearly half a million revellers any other year have been canned in favour of lower-key celebrations.

Lord Mayor Sally Capp said it was natural people would want to celebrate at the end of a difficult year.

But cancelling the fireworks meant a celebration of the city's hospitality industry, inspired by European piazzas and squares, could go ahead instead.

Nearly a dozen outdoor dining precincts have been set up across the city, including Hardware Lane, Chinatown, Spring Street and Little Bourke Street.

Additional police will be on patrol, with dogs and horses and on the water.

VICTORIA'S NYE RULES:

* Up to 30 visitors to your home per day with no limit on the number of households they're from.

* Up to 200 people meeting outdoors in public.

* Practise physical distancing, and wear a mask if you can't maintain 1.5 metres from people you don't live with.

* Masks are mandatory on public transport and ride share services.

* Only share happy new year hugs and kisses with immediate family and those you live with.

Australian Associated Press