Victoria on Monday reported 116 cases and 15 deaths from the virus, all linked to aged care, in the past 24 hours, down from a peak of more than 700 cases early this month.
It takes the national toll to 517.
Australia saw a surge in infections in the past month in Melbourne, Victoria's capital and the country's second-largest city, but cases have been trending downward in recent days helped by a total lockdown.
Monday's cases are the lowest in seven weeks, when 74 cases were recorded on July 5.
Victorian Premier Dan Andrews says the state is on the verge of double-digit cases again.
"I'm proud and grateful to every single Victorian who is playing their part in delivering a successful strategy," he told reporters in Melbourne.
Mr Andrews will ask the Victorian parliament to extend the state of emergency for another 12 months.
"If there is a vaccine before then, or if circumstances change dramatically, you would always adjust your rules," he said.
A state of emergency can only be declared for six months at a time, but the premier wants to change the laws so it can exist for 12 months.
While the Melbourne lockdown has curtailed the spread of infections, it has wreaked havoc on the economy with Australia's effective unemployment rate expected to climb above 13% by the end of September, according to government estimates.
Nearly half a million people could lose their jobs due to the full lockdown in Melbourne, Treasurer Josh Frydenberg said on Sunday.
Meanwhile, a coronavirus outbreak in Queensland is being monitored closely.
Authorities have expanded a public health alert to 67 venues, up from 40, after a Covid-19 cluster linked to a Brisbane Youth Detention Centre grows.
The state recorded one new case on Monday, taking the centre's cluster to 10.
The cluster began from a worker who was diagnosed with the virus last week, with the 77-year-old Ipswich woman continuing to work while infectious.
More than 200 of 500 staff at the Wacol centre have tested negative and more than 110 youths returned negative results.
Chief Nursing and Midwifery Officer Alison McMillan said the outbreak was being monitored "very closely".
New South Wales has recorded three new cases on Monday, with two cases from returned travellers in hotel quarantine and one linked to Liverpool Hospital.
The border closure debate has reignited after new Treasury analysis showed the unemployment rate was expected to rise above 13 per cent in coming months.
Deputy Prime Minister Michael McCormack says the borders can't remain shut forever.
"We can't just put a wrecking ball through the state economies and then expect everything to be alright out the other side," he told Sky News on Monday.
"There has to be a time when premiers look at their borders and say: Well enough's enough, the numbers are so low that we should be able to ease those border restrictions."
Deputy Nationals leader David Littleproud went a step further, describing borders as "an arbitrary line that regional Australia have outgrown and evolved past".
He says states need to do more to help agriculture workers cross borders for work.
Federal parliament began a two-week sitting on Monday, with strict virus controls in place.
Western Australia recorded one new case on Sunday, an interstate traveller who had returned from overseas and tested positive while in hotel quarantine.
- AAP and Reuters
