Millions of rapid antigen tests are set to be manufactured in Victoria from April this year if the plan is approved by the Therapeutic Goods Administration (TGA).
Premier Daniel Andrews today announced Lumos Diagnostics, together with its delivery partner Planet Innovation, will establish a manufacturing facility and innovation hub in the state to produce the RATs.
The government aims for one million tests to be manufactured every month from April and three million after July, before production ramps up to full speed from October onwards.
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The premier said the state aimed to produce up to 50 million RATs every year.
"That's a fantastic outcome," he said.
"This is a valuable commodity, perhaps never been more valuable."
The company, Lumos, is already manufacturing RATs for Canadian and European markets.
The project will create at least 70 ongoing jobs as the facility will also be able to produce diagnostic tests for infectious diseases, tropical diseases, chronic diseases and reproductive health.
Victoria braces for potential COVID-19 spike
Victoria has recorded 14,553 new cases of COVID-19 amid warnings infections could spike as students return to classrooms for the start of the school year.
Another 25 people have died with the virus.
There were 150 infections detected across 1230 state schools yesterday, on day two of Term One.
However, none of those schools will close as isolation rules have relaxed in the state.
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"I think if we are going to see a spike in cases from schools, it will take a little while for that to be identified in terms of the surveillance system, but we will see some increasing cases, I think that's very likely," infectious diseases expert Professor Sanjaya Senanayake told Today.
"We've got a group of people who haven't been together for a very long time who are now gathering together, so it's likely to happen."
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Professor Senanayake hoped the rise in cases would be mitigated by the COVID-19 preventative measures put in place, including air purifiers and the twice-weekly rapid antigen testing for students.
The state's elective surgery ban could also soon be lifted as COVID-19 hospitalisations plummet.
Hospitalisations have decreased to 768 patients in state hospitals, with 99 people in ICU.
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Reports suggest the ban could lift as early as mid-next-week, which could see the private sector go to 50 per cent pre-pandemic levels.
However, it remains unclear if public hospitals will follow suit.