The Victorian government will issue a statewide Code Brown for its health service, which may postpone leave for thousands of staff and defer non-essential services.
It is the first time that the emergency setting has been activated in multiple hospitals across the state.
A Code Brown is usually reserved for external emergencies such as natural disasters and mass casualty events.
It formalises and streamlines the health system's emergency management in response to the growing number of people in hospitals.
The Code Brown will come into force at midday on Wednesday for all metropolitan hospitals and six regional hospitals, with each site to put in place different strategies to respond to the activation.
Acting Minister for Health James Merlino said the healthcare system was buckling under the Omicron wave, and it was "the right time" to issue the Code Brown to anticipate a peak in hospitalisations which could see more than 2,500 COVID patients.
"We've reached a point in our healthcare system where it's juggling extreme workforce shortages … alongside a vast number of patients with COVID-19 who require hospitalisation, alongside that an extraordinary workforce that are absolutely exhausted."
Around 4,000 health staff are currently unavailable because of COVID-19 infections.
The state is expected to reach a peak in hospitalisations in February, where up to 100 COVID patients could be admitted every day.
Mr Merlino said Code Brown will allow hospitals to redeploy staff to areas of highest priority, prioritise the offloading of ambulance patients to get paramedics back on the road, change services to free-up staff and re-distribute demand between a number of hospitals.
It could also mean healthcare workers might be performing different roles than usual, and be consulted with other staff about their ability to take leave.
A Code Brown was issued at a Melbourne hospital in 2016 after thunderstorms caused widespread asthma attacks and hospitalisations, and also during the 2017 Bourke St attack.
Currently hospitalisations in the state are at some of the highest levels during the pandemic.
Victoria's COVID-19 hospitalisations are at 1,152, a slight reduction in the 1,229 reported on Monday.
A further 22 deaths were recorded in the state.
Of the patients in hospital, there are 127 in intensive care, 43 of whom are receiving ventilation.
COVID-19 fines may be withdrawn, investigation launched
The Victorian government has admitted it may have to withdraw a number of COVID-19 fines that were issued in an administrative error.
In a statement, the Department of Justice and Community Safety said it had launched an investigation into the appointment of a small number of Authorised Officers and the issuing of "enforcement outcomes" under the Public Health and Wellbeing Act.
Under the Act, individuals have faced fines of almost $1,000 for failing to comply with pandemic orders, and $3,000 for breaching quarantine requirements.
"If the review were to identify any issues, the department would then work to confirm whether any enforcement outcomes are affected," a spokesperson said.
Patient fakes illness to get COVID-19 test
Royal Melbourne Hospital Emergency Department Nurse Unit Manager Susan Harding said her hospital was very supportive of the Code Brown activation to ease pressure on health workers.
"This is a really important message we are sending by activating this Code Brown, because we absolutely need to safeguard the resources that we have for time-critical emergency department presentations," she said.
She urged people to bypass the state's overburdened emergency departments unless they needed urgent specialist care, pointing to one incident where a person lied about their symptoms in order to receive a COVID test.
"What we don't want is for people to unnecessarily present to the emergency department," Ms Harding said.
"They presented to the emergency department and were fast-tracked down to a resuscitation room at which point they declared they didn't have chest pains, and they really wanted a PCR and wanted it quickly.
"That is an unbelievable misuse of resources."
Ms Harding said they welcomed people who "absolutely needed" care, but they must be critical.
She urged people to consider other resources, like telehealth appointments.
Health sector welcomes Code Brown activation
The Victorian Healthcare Association has said the decision to call a Code Brown highlights the critical situation facing Victorian hospitals.
CEO Tom Symondson said health staff were overwhelmed by COVID-19 patients and the impact of infections on staff, and the Code Brown alert came "at the right time".
"The next month could be the most challenging period our healthcare workers will ever face," Mr Symondson said in a statement.
"This coordinated, system-wide approach will help us use our precious healthcare workers and resources wisely."
Acting Secretary Paul Gilbert from the Victorian branch of the Australian Nursing and Midwifery Federation also welcomed the Code Brown activation, saying it sent a "crystal-clear message" about the dire situation facing the Victorian community.
"Nurses and midwives have had the week from hell, on top of two years of intense difficulty," he said in a statement.
Mr Gilbert said an emergency surge staff, which includes students, was already feeling exhausted from the pandemic.
"The Andrews government has acknowledged nurses' and midwives' serious concerns and is sending an honest, crystal-clear message to the community that our health system is facing challenges not seen in more than a century," he said.
Isolation exemptions expanded
The government has already granted exemptions for some health workers to waive isolation requirements in order to ease pressure on the healthcare system.
Those exemptions will be expanded from midnight tonight, to include close contacts who are teachers and those who work in emergency services, prisons, freight and transport.
They will be able to return to work, provided they test negative using daily rapid antigen tests and follow other measures.
Last week, the Victorian government announced it would expand the exemptions for essential workers in order to ease the impacts of staff shortages.
Under the new rules, workers who are close contacts must wear masks and be asymptomatic, they can't enter shared break areas and employers must take steps to deploy the worker in areas where transmission risks are lower.
But there are concerns that rapid antigen test shortages will continue preventing people in key industries from returning to work.
Victoria's police union says the force won't be taking advantage of new isolation exemptions for close contacts due to a lack of rapid antigen tests.
Police Association Secretary Wayne Gatt said the union supported the change and described it as a "fantastic initiative" but said it relied heavily on the supply of tests.
"The number of tests that would be required, given the fact that we have about 800 police workers currently furloughed, is a significant one, in terms of the number of tests that would ensure people could be tested every day for five days," he said.
Exemption not used for paramedics
Ambulance Victoria has stopped asking paramedics who are close contacts to return to work, the union representing ambulance workers said.
The emergency service been overwhelmed amid a rise in COVID-19 hospitalisations, with the number of staff furloughed due to infections or being close contacts putting further strain on the service.
Brett Adie, secretary of Ambulance Employees Australia, said workers who were close contacts were initially allowed to return to the job, but Ambulance Victoria stopped the practice last week due to staff feedback and data around the number of close contacts who test positive.
"The risk is if you've actually got these people who are household contacts and more likely to get COVID, that you're actually going to then expose more people to COVID in the workplace," Mr Adie said.
"You actually lose more people who are then COVID positive."
There are now at least 235,035 active cases in the state.
The state has officially recorded 20,180 new COVID-19 infections. The true number of new cases in the community could be much higher as a result of immense pressure on overwhelmed testing networks.
The new cases were reported from 8,433 PCR results and 11,747 at-home rapid antigen tests (RATs).
About 24 per cent of Victorian adults have received three doses of a vaccine so far.