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The death is the first in Australia in a month, taking the national toll to 103.
Of the state's 20 new cases, seven are linked to known outbreaks, one is a returned traveller in hotel quarantine, and nine have been identified through routine testing.
Three cases remain under investigation.
Victorian's Chief Health Officer Brett Sutton says 241 cases in the state have been transmitted through the community.
"That's an increase of eight since yesterday. That number has been around 10 every day, but a decrease of eight is somewhat encouraging," he told reporters on Wednesday.
"It certainly means we're not getting an increase or an exponential increase in community transmission cases day-by-day."
It is the eighth day of double-digit growth in new cases, bringing the state's tally to 1884. About 140 cases remain active.
It comes after the state paused the easing of restrictions and identified six local government areas as coronavirus hotspots: Brimbank, Casey, Cardinia, Darebin, Hume and Moreland.
The spike has led to a "surge" in people wanting to get tested, Professor Sutton said.
"That's put a lot of pressure on the testing sites, but since the weekend we have worked with planning to get as many new testing sites up in those areas as possible," he said.
A testing site at Melbourne Showgrounds will open at 1pm on Wednesday for Keilor Downs Secondary College students, teachers and parents only.
From Thursday, the showgrounds will be available to the rest of the public.
Another drive-through testing site has been established in Cragieburn, where some people waited up to four hours to be tested yesterday.
Victoria Police have been called in to manage the traffic caused by an influx of people wanting to get tested at the Chadstone shopping centre drive-through testing site.
"We do apologise and we ask for people to be patient," Professor Sutton said.
"People should go to their GPs in the first instance to see if they can get testing there."