Victoria reported 17,636 new cases on Wednesday from 59,682 tests, a positivity rate of 29.5 per cent.
There were also 11 more deaths and active cases have risen to 51,317.
Acting premier Jacinta Allan said testing systems were under significant pressure but the government has secured a further 10 million rapid tests, in additional to 34 million announced last week.
The first of the 44 million free RATs will be distributed in coming days, although it is still unclear how, and she hopes they will ease testing demand.
By 8am, more than 30 state-run sites temporarily suspended testing because they'd reached capacity and by 10am it was more than 50.
That was on top of 54 testing sites run by four private pathology providers, which have suspended operations until at least January 9 to allow their labs to catch up on a backlog of tests.
The providers - 4Cyte, Australian Clinical Labs, Melbourne Pathology and Dorevitch - are responsible for three-quarters of processing in Victoria.
Opposition Leader Matthew Guy has again called for the state government to open more testing sites.
"We're doing half the tests of NSW," he said.
"For the queues and people waiting hours and hours in testing centres, they would no doubt be absolutely furious."
Causing as much controversy as testing availability is news that tennis star Novak Djokovic has been granted a vaccine exemption allowing him to enter the country to play in the Australian Open.
Tennis Australia and the state government have defended Djokovic's exemption, saying he is one of a "handful" of the 26 applicants who was granted an exemption from the strict vaccine rules.
Ms Allan said it would be "the decent thing" for Djokovic to explain.
"It's up to Novak Djokovic to explain to the Victorian and the Australian community the privilege of coming here and playing in a really big and important event," she said.
Acting sports minister Jaala Pulford acknowledged Victorians would be disappointed but denied there was special treatment, adding that applications were de-identified and the process conducted anonymously.
"No one is or will be receiving special treatment because of who they are or what they have achieved professionally," she said.
Ms Allan was also promoting vaccinations for children aged five to 11, with bookings open from 1pm.
State-run vaccination clinics will be decorated with a nature and animal theme to make the experience less intimidating for children, with additional support available to families.
Tom Connell, the chief of medicine at the Royal Children's Hospital, said it was understandable parents will have questions and concerns about vaccinations for young children but he said the jabs are safe.
"The dose of the COVID vaccination for five-to-11 is one-third that of the vaccine for aged 12 and over - it has been specifically tailored for younger children," he said.
He said there was no significant increase in adverse reactions compared to children aged 12 to 16, and trials showed the vaccine as 91 per cent effective in reducing lab-confirmed symptomatic diagnoses in children.
Meanwhile, Premier Daniel Andrews will interrupt his leave on Wednesday to attend national cabinet, expected to address community concerns around access to rapid antigen tests.
VICTORIA'S LATEST COVID-19 FIGURES:
* Active cases: 51,317
* Hospital cases: 591, up 75
* Hospital cases seven-day average: 503
* Active cases in ICU: 53
* Cleared cases in ICU: 53
* Cases on a ventilator: 20
