Mandates earlier came into effect for workers in construction, freight, health care, aged care and education.
The crowd gathered outside state parliament at midday on Saturday before moving onto Bourke Street Mall.
They waved Australian, Aboriginal and Eureka flags as well as those of other countries including Greece, Lebanon and Macedonia, and held signs with slogans such as “fear God not Dan”, “end segregation now” and “kill the bill”, in reference to the pandemic legislation before parliament.
Several bus and tram routes have been affected by the protest, with motorists urged to allow plenty of extra time if travelling into the city.
A protest against mandatory vaccination was also held in Sydney’s Hyde Park.
The new infections in Victoria on Sunday bring the total number of active cases in the state to 11,331.
There are 283 Victorians battling the virus in hospital, bringing the seven-day average down to 295, including 93 in intensive care and 20 on a ventilator.
There were 52,930 tests processed in Victoria on Saturday and 3,358 COVID-19 vaccine doses administered at state-run hubs, which are beginning to wind down now Victoria has reached 90.4 per cent double-dose vaccination coverage for those aged above 12.
Landmark sites at the Royal Exhibition Building and the Melbourne Convention and Exhibition Centre will deliver their last jabs in mid-December, along with Box Hill Town Hall.
Other clinics at Eastland shopping centre and Wyndham’s Eagle Stadium are scheduled to shut at the end of the week, followed by St Vincent’s Private in Werribee, the Melbourne Showgrounds and the Olivia Newton-John Centre next to Austin Hospital.
State-run hubs have been the engine room of Victoria’s vaccination push since opening in March, delivering about half of the state’s 10.6 million doses.
Fifteen metro and regional sites will remain open into next year to administer booster shots and potentially first and second doses to five to 11-year-old children, if and when a COVID-19 vaccine is approved by federal regulators.
The health department said it was working with the Commonwealth to better understand the potential impacts of the new Omicron strain of COVID-19 that has emerged in South Africa.