Victorian public housing tower residents who were locked down during Melbourne's second wave of COVID-19 have been offered a $5 million settlement by the state government. 

The class action, brought by residents of nine towers in Flemington and North Melbourne, alleged that the government wrongly detained them and threatened them with arrest if they left their homes. 

The government has denied the allegations but has proposed a settlement to resolve the issue without trial. 

The $5 million settlement would be split between residents who opt in, with adults receiving a full share and children half. 

The offer is subject to court approval, and residents must register by June 27. 

The government has not apologised for the lockdown, despite a 2020 investigation by the Victorian Ombudsman that found the government had breached human rights laws.