Homes and lives are under threat with nine emergency alerts issued for out-of-control blazes in Victoria's far east and northeast.
A fire is also threatening lives and homes in Melbourne's northern suburb of Bundoora, which has been placed under an emergency warning.
An evacuation alert was put in place, but residents have now been told it is too late to leave.
An emergency warning, the highest possible alert, was issued for a blaze west of Goongerah on Monday afternoon and an evacuation order remains in place.
Another emergency warning also was issued on Monday afternoon for a fire burning 13km from Walwa in the northeast, near the NSW border.
The bushfire is travelling from NSW River Road towards Walwa.
Emergency warnings have also been issued in East Gippsland for the W Tree fire, Ramrod Creek, Bullumwaal, Clifton Creek, Deptford, Mount Taylor, Waterholes and Fairhope.
The highest alert has also been issued for Suggan Buggan, Buchan, Buchan South and Sunny Point.
Suggan Buggan is a border town, also threatened by out-of-control blazes in NSW.
Similar alerts were already in place on Monday for the Ensay-Barmouth Spur fire, and the Wingan River fire.
The Ensay-Barmouth Spur fire had been two fires but joined overnight and has burnt about 100,000 hectares.
"It is quite an extreme day for us, really the first really bad day that we've had on this group of fires since they started on November 21," East Gippsland fires incident controller Ben Rankin told reporters at Bairnsdale.
"[It's] comparable almost to Black Saturday in some ways, if the forecast does eventuate as given to us."
Despite the plea for 30,000 holidaymakers in Lakes Entrance to leave on Sunday, the town was unlikely to be impacted by the fires, he said.
Emergency Services Minister Lisa Neville said people should not drive.
"It's too dangerous to be on the roads. The fires in East Gippsland are too dynamic, dangerous and continue to spread very quickly," she said.
The Princes Highway is closed between Cann River and Genoa, while the Great Alpine Road between Bruthen and Ensay could be shut for up to a fortnight.
The Princes Highway was briefly closed overnight after a fire developed a 14km plume and created its own lightning, the Bureau of Meteorology's Michael Efron said.
Sixteen fires started in Victoria overnight because of dry lightning, Ms Neville said.
Temperatures soared into the 40s across Victoria on Monday, with a total fire ban in place across the state and extreme fire danger ratings in most regions.
The weather bureau expects strong and gusty winds throughout Monday, as well as thunderstorms that will give way to much cooler air and rain across Victoria.
The temperature hit the forecast top of 43C in Bairnsdale, before a cool change is due in West Gippsland on Monday night and East Gippsland on Tuesday morning.
Rural Fire Service crews douse a home lost to the Green Wattle Creek Fire in the south-west of Sydney. Source: AAP
Organisers of New Year's Eve events across East Gippsland cancelled fireworks, but not other festivities, at Nicholson River, Metung, Paynesville foreshore and Lakes Entrance.
The hot, windy conditions in Melbourne have also prompted the closure of the Werribee Open Range Zoo.
In NSW, more than 900 homes have been destroyed but that number is expected to increase with rising temperatures and dry winds forecast to peak on New Year's Eve.
About 100 bush and grass fires are burning across NSW. Source: AAP
Temperatures are forecast to climb past 40C in western Sydney and parts of regional NSW by Tuesday, as air pollution in the city's southwest remains at a hazardous level.
Sydney's Parramatta Council is one of several to announce they have canceled fireworks and festivities, and will instead donate $10,000 to the NSW Rural Fire Service.
In South Australia, fires continue to burn on Kangaroo Island and a catastrophic danger has been declared for the Adelaide Metropolitan, Yorke Peninsula, Mount Lofty Ranges the state's Mid North.
Adelaide is forecast to reach 40C and firefighters are particularly worried about the potential for breakouts in the blaze burning in the Adelaide Hills.
Severe thunderstorm warnings have also been issued for parts of the South Australian coast, adding to the risk of bushfires from lightning strikes.
A watch and act alert is in place for two fires in remote parts of Western Australia, at the Stirling Range National Park and Higginsville mine site in the state's south.
In Tasmania, residents are urged to remain on high alert as scorching temperatures combined with forecast thunderstorms and winds increase fire risk.
