The New South Wales Rural Fire Service said bushfire-prone communities near Batemans Bay and Bega "should" move to large towns away from bushland by midmorning.
Hobart, the state's capital, experienced its hottest December day on record when temperatures hit 40.8C on Monday.
The state's Emergency Management Commissioner Andrew Crisp said "columns of fire" were punching into the atmosphere and generating their own unsafe weather systems.
New South Wales has borne the brunt of the fires, which have burned out more than 2.5 million ha of forest and bush land and destroyed the habitat of native animals, such as koalas.
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.
A 250km (155-mile) stretch of the Princes Highway east of Bairnsdale was closed on Monday.
Emergency warnings have been issued for eight fires in the region, about a four-hour drive east of the state capital Melbourne.
In East Gippsland, three fires are now ravaging the towns of Bruthen, Buchan and Bonang which are forecasted to grow significantly.
But a cool change was moving across the state, with temperatures forecast to drop to the mid-20s along with high winds and thunderstorms.
Ambulance Victoria said two children and a woman in her 70s were taken to hospitals after being locked in cars on Sunday and reminded people to never leave pets or people in cars.
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Emergency Services Minister Lisa Neville said on Monday morning that 16 fires started in Victoria overnight because of dry lightning.
It is the latest development in the bushfire crisis that has left at least nine people dead in Australia since blazes broke out months ago during the southern hemisphere winter and amid a prolonged drought gripping parts of the country.
East Gippsland Mayor John White said the thickets in the region were "completely dry" after three years of drought. Six Australian states along with the Northern Territory saw temperatures pass 104 degrees.
Officials have warned that "deteriorating weather conditions" could worsen bushfires in the state on Tuesday.
The remains of a auto that was destroyed by bushfires sits near a home in the town of Balmoral. Yesterday the NSW RFS gave the to go ahead to the Sydney fireworks.
As New Year's celebrations approach, more than 250,000 people have signed a petition calling for Sydney's famed harbor New Year's fireworks display to be canceled and for the money to be spent fighting the fires.
Details of a bushfire relief fund will be projected on the Sydney Harbour Bridge during the night.
This season's bushfires have killed 10 people, destroyed more than 1,000 homes and scorched more than three million hectares (7.4 million acres) - an area bigger than Belgium.
The Australian government has said it will compensate volunteer firefighters for lost revenue given the intensity of this year's wildfire season.