Hairy Goat owner Jade Kelson was elated with the news on Thursday.

"It's the best news I've heard in two years," Mr Kelson said. "Because our space is small all I could seat in our venue was 30 people."

However, he will again be able to welcome up to 85 double vaxxed patrons from Friday night.

"It's going to be great to have a full venue again," Mr Kelson said.

He said he was also looking forward to once again having live music at the venue.

"It will be terrific - it will make a massive difference."

Mr Kelson said the past three years had been extremely difficult for business owners in Liebig Street.

"First we had the Liebig Street works and then COVID hit," he said.

"It's been a pretty challenging time."

Bundy's Bar and Bites owner Jayaweera 'Bundy' Bandara was also celebrating after learning of the easing of restrictions.

"I'm so happy," he said.

Mr Bandara said it had been a very challenging time for the business, which opened two years ago. "It's been really hard and really stressful. "We've hung in there and we're hoping for a busy summer," he said.

Mr Bandara said he would again be allowed to have 120 people in his venue from Friday night.

"It's a day to celebrate," he said. "Hopefully we don't have any more lockdowns."

The Seanchai is expected to be a popular spot on Friday night, with up to 700 patrons allowed.

Owner Matt McMahon said he was looking forward to two busy nights this weekend. He said he believed Saturday would be particularly busy, with popular music duo Mitch and Jackson performing. "It's going to be a big weekend," he said.

"It will be great to have a different vibe in the pub with live music Friday and Saturday nights."

Premier Daniel Andrews said Victorians had earned a "normal Christmas".

From 11.59pm Thursday night, there will no longer be caps on how many people can be in different spaces.

There will no longer be a limit on the number of visitors to a home and no density requirements on the number of patrons in a pub, cafe or restaurant.

"Dance floors are open again. All of these things which we've missed and which are absolutely about getting to as normal a situation as possible, that normality we have all craved we are able to deliver that as a result of the quite amazing work that Victorians have done in getting vaccinated in record time and in record numbers."