Victoria is looking to introduce a new model of quarantine as an alternative to the hotel system in Melbourne's CBD.
Premier Daniel Andrews said a senior group of officials were "actively pursuing the construction of a purpose-built quarantine centre".
He said it would be based in large part on the Howard Springs model in the Northern Territory and would likely be built at Avalon Airport or around Melbourne Airport.
The hub would be used for emergency accommodation needs including for COVID-19 and bushfire requirements.
Today, the Holiday Inn on Flinders Street, a so-called "hot hotel", is being cleared of guests after a sprinkler system broke and flooded a room on Saturday.
Mr Andrews said the new-look quarantine facility would involve the Federal Government and the private sector.
The premier flagged the hub would be made up of small, separate homes.
"People will be in the same location, but not sharing the same spaces," he said.
"It would be a cabin, village-style environment with fresh air where there would be lower risk."
Mr Andrews said the prefabrication of the cabins could be done relatively quickly off-site, but the issue would be around connecting services, such as water, power and sewage.
He said it was a beneficial alternative to hotel quarantine.
"It's not a zero risk undertaking ... but it has a lesser risk than shared facilities in the centre of Melbourne, where even if people are separated, they're still sharing the same space.
"That's not to say it's unsafe in any way, but it's at one risk level.
"We think by building this purpose-built facility, we can get the risk level down further," the premier said.
The Victorian Government will engage the Northern Territory Government in planning with officials heading north to examine the Howard Springs site.
Mr Andrews said it would be a timely and costly undertaking but worth it for the safety of Victorians and other travellers.
"The real issue here is getting this done safely, getting as many people home as we can safely, acknowledging it's not the 2020 virus," he said.
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