Fire crews have stopped the head of a grass fire that was burning out of control south of the township of Moyston, west of Ararat, in western Victoria, but one home has been lost.

The emergency warning for communities south of Moyston, including Rocky Point, Willaura North and Maroona, was downgraded to a watch-and-act message.

Further watch-and-act messages for Gre Gree and St Arnaud were also downgraded to advice messages.

The blaze had slowed and firefighters have made good progress, but the Country Fire Authority (CFA) said the danger had not passed.

Residents were advised to stay close to shelter in case the conditions change suddenly.

By 9:00pm (AEDT) the fire had burned more than 3,500 hectares.

Emergency Services Commissioner Craig Lapsley confirmed one house had been lost but said it was extremely lucky that the fire went around Moyston.

"Firefighters have done a great job on the ground. In excess of 38, 41 degrees and out there doing it in windy conditions," he said.

"We also had significant aircraft over the fire, and it still ran hard, which is exactly what we thought it would do."

More than 250 firefighters from the Country Fire Authority (CFA) and Department of Environment and Primary Industries battled the blaze.

There were a number of aircraft also involved in the firefighting effort, including an air crane and two air tankers.

A relief centre has been set up at the Ararat Town Hall on the corner of Barkly Street and Vincent Street, and a community meeting was held at 7:00pm at the Alexandra Oval Community Centre in Ararat.

Mick Hodder at the CFA State Control Centre earlier described it as "quite a significant fire".

Aerial view of lots of black smoke and flames from the fire. ( ABC News )

"What we're trying to do is protect assets. And that's why we have a lot of aircraft trying to help the firefighters on the ground," he said.

"They will use both water and retardant and not only will they try and extinguish the fire but they will try to protect assets at the same time."

A number of roads in the area were closed.

Ararat resident Matt Pearce went to One Tree Hill, just outside of town, to take a look at the fire.

"You can see quite a bit of smoke from the township," he said.

"It looks quite hairy. There's a fair bit of smoke and a lot of aircraft."

He said the conditions were very hot and very windy.

Two days of extreme temperatures forecast

Temperatures hit 40 degrees Celsius at Mildura and Swan Hill, but were forecast to climb to 43C today and Saturday.

In Melbourne the temperature was 36C about 2:30pm (AEDT) but was expected to reach 39C today and 41C on Saturday.

Total fire bans were declared for eight of nine districts in Victoria last week, excluding East Gippsland, and on Saturday the entire state would be under a total fire ban.

That means it is illegal to start a fire in the open, people must not use equipment that could start a fire and campers must not light solid fuel fires.

Acting Victoria Police Commissioner Tim Cartwright called for public to be on the lookout for dangerous behaviour.

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"It's not just arsonists we are worried about, but inactivity," Acting Chief Commissioner Cartwright said.

"If you are travelling about and see people doing stupid things, campfires shouldn't be alight, we shouldn't be seeing angle grinders, ring triple-0, you can also ring Crime Stoppers.

"We are well-prepared, we work well with the other services, we need the community to be well-prepared."

Earlier Friday morning, a woman was arrested over a deliberately-lit grassfire in Tatura, in the state's north, which followed more than 40 in the past year, police said.

Police were investigating at least 40 suspicious fires in the area since last summer.

"We are talking to this person around a number of fires," Acting Chief Commissioner Cartwright said.

"We have preventative patrols in an environment.

"We also run investigations on suspicious people, people we consider to be high risk."

Premier urges Victorians to heed fire warning

Victorian Premier Daniel Andrews said it was up to all Victorians to heed the warnings.

"A total fire ban means just that and every Victorian should err on the side of caution," Mr Andrews said.

"If we are all responsible, if we all play our part and do the right thing and don't in any way contribute to a fire starting, that means our state has a much greater chance of being safe and sound over the next 36-48 hours."