Aerial views showed protesters breaking through police lines and being met with pepper spray, as they continued to march through the city streets.
Victoria Premier Daniel Andrews on Saturday expanded a lockdown in that city to the entire state as he reported 61 new locally acquired cases.
At least 39 of the new Victoria cases were active in community while infectious, raising concerns over officials' ability to gain control over the outbreak. Eighteen people were in hospital, eight in intensive care and six on ventilators.
Australia's COVID-19 numbers are still relatively low compared to other developed countries, with just over 43,000 cases and 978 deaths, but the latest outbreak has seen a significant resurgence in cases.