COVID-19 Quarantine Victoria Commissioner Emma Cassar said the guests were being moved after sprinklers went off on the hotel's fourth floor, causing damage to four of the eight levels.
Victoria has recorded just 12 additional cases of the virus since the lockdown began, taking the active tally to 25, while no new cases have been detected in the past 24 hours from more than 39,000 tests.
But masks will still be mandatory indoors, and will be required outdoors where people can not maintain 1.5m physical distancing.
Attendance from Thursday onwards will be capped at 7,477 spectators for each session, which is approximately 50 per cent capacity.
Public gatherings are limited to 20 people.
Retail and hospitality businesses will be able to reopen with the same density limits that were in place last week. Snap lockdowns ordered by authorities in Australia and New Zealand appear to have worked well in controlling new waves of infections-in contrast to Europe, where restrictions have been less rigourous.
Face maks will still be mandatory both outside and inside, with Chief Health Officer Brett Sutton explaining that maks have "almost certainly stopped some transmission that would have occurred otherwise".
"The other Grand Slams they played a year ago, they didn't have to fly so far or do 14 days of quarantine, so we have to overcome those and get the top players to play here".
"There are literally thousands of people who have been potentially exposed to infectious cases. They need to not be complacent", he said on Wednesday.
"That is exactly what we said we needed and exactly what we said would work".
"We will get to that 75 per cent when it is safe to do so", Premier Andrews said.
Reason Party leader MP Fiona Patten said in a statement on Wednesday she would vote against the bill and urged the government to bring forward legislation specific to the pandemic.
"I'm very, very pleased to announce that the restrictions will come off, nearly all of them, at midnight tonight", said Andrews.
Australia has largely avoided the high rate of COVID-19 cases and deaths seen in other developed countries thanks to border closures and effective contact tracing systems.
The Northern Territory has revoked Greater Melbourne's status as a COVID-19 hotspot.