Twice-weekly rapid antigen tests will be "strongly recommended" for staff and students and teachers will be required to have a booster dose under the Victorian government's back-to-school plan.
The government will give more than 14 million of the rapid tests to schools and early childhood settings.
Under the plan, the twice-weekly rapid test would be done by all members of the school or childcare setting at home, for at least the first four weeks of term.
Students and staff at specialist schools, where there is often a higher risk of serious illness, will be recommended to test five days a week.
"That surveillance testing is all about detecting cases, not necessarily every case, that would be almost impossible given the amount of transmission that is in the community," Premier Daniel Andrews said.
About 1 million students will return to the classroom for the scheduled start of term 1, which is January 28 in most state schools.
While a large portion of children aged 12 and above are double vaccinated, there are still about 350,000 five-to-11-year-olds eligible for vaccination who are yet to receive a first dose.
Supply and distribution issues dogged the start of the rollout for that cohort, which began on January 10.
Mr Andrews said a rise in new infections was expected when schools opened up, but Victoria's high vaccination coverage meant remote learning was no longer an option.
"It will look a bit different. There will be challenges. It won't all be smooth," he said.
Remote learning will be considered "only as a localised, short-term last resort".
A similar schools announcement was made in New South Wales an hour earlier. States are deciding their own approach to how schools will operate during the Omicron wave after national cabinet failed to come up with a federal approach.
Educators must have booster shots by February 25
Towards the end of 2021, schools and childcare centres were linked to a significant portion of the state's COVID-19 clusters and outbreaks.
Asymptomatic teachers are now on the list of professions exempt from close contact isolation rules, and a "job pool" announced on Saturday is being stood up to account for staff shortages.
Under the new rules, school staff must receive a third dose of a COVID-19 vaccine by February 25 if they are already eligible, or within three months and two weeks of receiving a second dose.
Across the state, 30 school pop-up vaccination sites will also be stood up in a bid to get more young children immunised against COVID-19.
Air purifiers and outdoor learning will also form part of the government's plan to combat the spread.
Mask-wearing will continue to mandatory indoors for all students in years 3 and above.
Mr Merlino, who is also Deputy Premier, said the state would now recommend all students and staff wore surgical or N95 masks, rather than cloth face coverings.
The government will deliver 30 million disposable surgical masks to schools over the first four weeks of term, with 5.8 million set to land in the first week.
Victorian COVID case peak 'likely behind us' as state records 14 further deaths
The schools announcement was made as the state recorded the deaths of 14 more people with COVID-19.
Authorities have confirmed the number of people in hospital after contracting the virus sits at 1,002, slightly down from 1,029 reported on Saturday.
Of the people in hospital with COVID-19, there are 120 in intensive care units, including 44 people receiving ventilation.
There are now at least 191,058 active cases of COVID-19 across the state.
There were 13,091 new infections officially reported on Saturday, continuing a significant downward trend in cases.
However, the real number of new infections in the community could be much higher due to pressure on the testing system and what authorities say could be a number of asymptomatic or undetected cases.
The latest figures came from 6,625 PCR test results and 6,466 rapid antigen tests.
Chief Health Officer Brett Sutton said the peak in cases was "likely behind us".
"ICU cases and deaths haven't peaked, but will hopefully stabilise soon," Professor Sutton said on social media.
The number of people in intensive care units has remained about the same for the past three months.
Deakin University epidemiologist Catherine Bennett said she expected to see "more of a plateau than a rapid decline" when it came to the number of new infections.
"You have to wait for a couple of weeks to start to clear the existing cases and hopefully by then we'll have less new cases," Professor Bennett said.
"That's when you start to see the numbers come down. That's when we see less impact on our hospitals. So we've still got a week or two of this plateau, when it does have its greatest impact on workforces everywhere.
Third dose mandate 'very close', Andrews suggests
There were 26,581 vaccine doses administered at state-run sites, and more through the GP and pharmacy network.
About 31 per cent of Victorian adults have received three doses of a COVID-19 vaccine.
Mr Andrews said he believed a mandate for a third vaccine dose was close, calling immunisation a "three dose project".
"There has not yet been a decision from [vaccine advisory group] ATAGI — I think it's very close — and national cabinet will confirm it, that this is not two plus an optional, it's three to be fully vaccinated."
Victoria has been pushing for the third dose to be considered essential for being considered fully vaccinated.
The state government has been consulting with retail and hospitality sector groups on the possibility of making a third dose mandatory before entering venues.
