Restaurants, pubs and cafes can provide takeaways only.
"We've seen overseas how hard that movement can be to control".
Merlino said Victorians will only be able to leave home for five reasons: shopping for necessary goods and services, authorised work or permitted education, exercise (a two-hour limit with one other person), care giving, and to get vaccinated.
Researchers say they were unable to find any other possible route of transmission, having checked staff hygiene procedures, contact between rooms, and the air conditioning system.
More than five million people in Australia's second-biggest city of Melbourne were ordered into a snap week-long lockdown Thursday, as officials blamed a sluggish vaccine rollout and hotel quarantine failures for another virus outbreak.
Case A was then tested twice more - thought to be on April 24 and May 3 - both of which came back negative.
By the time Case A had fallen ill and tested positive in Melbourne on May 11, he had sparked a chain of infection that has led to 26 positive cases so far - with thousands more people told to get tested and isolate.
The United Kingdom's vaccine rollout was hastened in early 2021 after the number of new cases surged - hospital beds were full and residents were forced to endure a grueling lockdown.
The man, in his 60s, could be the possible "source case" of the Whittlesea outbreak, although a definitive link is yet to be established.
Schools will move to remote learning, excluding vulnerable children and the children of authorised workers.
The "circuit-breaker" lockdown is created to allow contact tracers to get on top of cases, with residents permitted to leave home only for essential reasons including getting vaccinated.
These fears were realised today when Victoria recorded a dozen more COVID-19 cases overnight, taking the cluster to 26. Masks must be worn outside the home.
A spokesperson from the New Zealand Ministry of Health said this afternoon it was "crucial" everyone who has been in Victoria since May 11 was checking Victoria Health's website for locations of interest.
Researchers believe Case B could have left virus particles lingering in the air between the rooms - which were at the end of a corridor and thus less-well ventilated - before Case A inhaled them and was infected. Groceries are only allowed by one member of the household once a day and all essential stores are closed.
"That is not a criticism, it is just a fact, we have had breaches in hotel quarantine right around our country".
Mr Merlino also announced Victorians over 40 are now eligible for the COVID-19 vaccine.
"From tomorrow morning, vaccinations at state sites will be expanded to include those in the 40 to 49-year-old age group, for the Pfizer vaccine", he said, before urging those eligible to book their jab.
Australian Prime Minister Scott Morrison spoke to reporters this afternoon saying Victorians again faced a "challenge and a battle".