Around 4,000 people have left their homes in Victoria and have been urged to move into the sea if the blazes around them continue to worsen.
Some have been forced to camp on wharves or have been evacuated by boat after multiple fires surrounded the town of Mallacoota, cutting off road access.
“Mallacoota is currently under attack,” Andrew Crisp, the state’s emergency commissioner said.
“It is pitch-black, it is quite scary,” he said. “The community right now is under threat but we will hold our line and they will be saved and protected.”
The death toll from Australia’s fires has now risen to 12 after a father and son died in the early hours defending their home in New South Wales. Five others have been reported missing.
Since blazes started in September, five million hectares (12 million acres) of land has been torched, covering an area larger than the size of Japan.
Emergency services officials said it was possible towns in this Gippsland area could be evacuated by sea as the fires, which are being fanned by strong winds, continued.
Authorities urged tens of thousands of residents and tourists to evacuate Victoria at the weekend as they predicted Tuesday would be one of the most significant fire weather days in the state’s history.
Additional reporting by Press Association