A pop-up village will house flood victims forced from their homes in central Victoria.
Rochester residents will have the option of moving into caravans and modular dwellings in nearby Elmore from the end of the week.
Major infrastructure and houses were severely damaged when floodwaters surged through the community a fortnight ago.
Emergency Services Minister Jaclyn Symes said on Wednesday it was unclear how many people would take up residence in the new village but up to 350 dwellings would be made available.
"Staying close together, close to town as they rebuild is something they have asked for," she told reporters.
A clean-up has meanwhile started in Melbourne's east after flash flooding which inundated cars and businesses on Tuesday.
Lilydale was hit with 70 millimetres, including a burst of 30mm in just half an hour.
Many businesses in the main shopping strip were overwhelmed with water but the full scale of the damage is unclear.
Lefty's Barber Shop owner Tara Taylor said chairs, fridges and washing machines were destroyed after water knee-deep gushed into the premises.
"I'm assuming it's pretty much everything in there," she told AAP.
"I think there's quite a bit of damage."
The State Emergency Service received about 400 calls for help in eastern Melbourne in 90 minutes, with 25 people rescued from cars after attempting to drive through floodwaters.
In East Gippsland, residents have been put on alert for the first time with the Snowy River is at risk of major flooding from Buchan to Orbost and Marlo.
Major flooding also continues along the Murray River, to the northwest, between Echuca and Barmah.
Further showers forecast for central and eastern Victoria on Wednesday are expected to move south on Thursday.
More than 30 schools and 400 roads remain closed across the state.
A large emergency relief centre at Bendigo will shut after providing shelter for up to 280 people at its peak.
Elsewhere, Maribyrnong City Council has resumed clean-up efforts after briefly halting hard rubbish collection due to extreme weather.
At least 1500 tonnes of waste has been removed as residents assess the extent of the damage.
