The 5km restriction will be increased to allow people to travel up to 25 kms form their home, while larger groups will be able to meet outside.
From Nov 1, remaining retail and restaurants, cafes, pubs and services such as beauty salons will reopen.
The Victorian Premier says 55 New Zealanders who have touched down in Australia have signalled their intention to travel to Victoria, despite the state not agreeing to be part of the trans-Tasman travel bubble.
"We have a conversation with them, and we make sure that they know what the rules are". We get a phone number. "Then we will all be able to move freely around our state".
"We need to wait just a bit longer - until 11.59pm on 1 November - to take the rest of the Third Step that will see retail, hospitality and personal care services open again", he said.
Mr Andrews said authorities were now making contact with each of the travellers to ensure they are aware of the coronavirus restrictions in place across the state. "It's really hard just being in this limbo all the time".
Prime Minister Scott Morrison expressed sympathy for the "frustrations" of businesses.
Andrews said there were now authorised officers based at Melbourne Airport as a result of the incident.
He and his government have been urging Victoria to ease its measures faster and further in recent weeks as case numbers have dipped. This is far below a peak of 687 reported on 4 August.
According to the Andrews, Victoria had not wanted to be in a travel bubble with New Zealand.
But the Victorian government has said it did not expect to receive global travellers as a result of New South Wales making a travel bubble arrangement with New Zealand.
However, they have already run into trouble, with 55 of the arrivals travelling on from Sydney to Victoria.
"One of them was in Byron Bay [in New South Wales] and yet we were told they had landed and travelled to Melbourne".
However, it appeared the information on the list was not completely accurate.
Mr Andrews' comments came after Mr Tudge said Victorian officials were present in Australian Health Protection Principal Committee (AHPPC) meetings earlier this week where it was discussed the travellers from New Zealand would be free to enter Victoria after arriving in NSW due to the lack of border restrictions.
Under the deal between the two nations, New Zealanders are permitted to travel quarantine-free into both NSW and the Northern Territory, under the proviso they've not been in a Covid-19 hotspot in the 14 days leading up to their travel.