South Australia will reopen its border to Greater Melbourne from 12.01am on Friday.
The lifting of border measures mean people entering the state from Melbourne will no longer be required to undergo COVID-19 testing on days one, five and 12.
SA Premier Steven Marshall described the border reopening as a "huge relief".
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"Victoria has got on top of their outbreak, we are very grateful for the work they have done and we are looking forward to welcoming people from across that border," he said.
South Australia's Chief Public Health Officer Nicola Spurrier said Victoria had done "extremely well" in containing the Holiday Inn outbreak.
"That is all very much under control," she said.
"There is no evidence at all of community transmission in that state."
The majority of people from Melbourne currently undergoing quarantine will be able to be released, aside from those who attended a tier one exposure site.
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However, they will still be required to undergo COVID-19 testing.
Dancefloors will also be permitted in South Australia from Friday for venues with a capacity of up to 200 people.
Guidelines including the one person per two-square-metre rule must be followed and COVID management plans are required to be in place.
Venues with more than 200 patrons will be permitted to have 50 people on the dancefloor at one time.
The state recorded one new case of coronavirus in a returned traveller which is being treated as a historic infection.
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