Pastoralists from Van Diemen's land began squatting in the Port Phillip hinterland on the mainland in 1834, attracted by its rich grasslands. In 1835, John Batman and others negotiated the transfer of 100,000 acres of land from the Kulin people. However, the treaty was annulled the same year when the British Colonial Office issued the Proclamation of Governor Bourke stating that all unalienated land in the colony was vacant Crown Land, irrespective of whether it was occupied by traditional landowners. Its publication meant that from then, all people found occupying land without the authority of the government would be considered illegal trespassers.
In 1836, Port Phillip was officially recognised as a district of New South Wales and opened for settlement. The main settlement of Melbourne was established in 1837 as a planned town on the instructions of Governor Bourke. Squatters and settlers from Van Diemen's Land and New South Wales soon arrived in large numbers, and by 1850 the district had a population of 75,000 Europeans, 2,000 Indigenous inhabitants and 5 million sheep. In 1851, the Port Phillip District separated from New South Wales as the colony of Victoria.
Stocari iz Van Diemenove zemlje (kasnije nazvana Tasmanija) počeli su da se doseljavaju u zaleđe Port Phillipa na kopnu 1834. godine, privučeni bogatim travnjacima. Godine 1835, John Batman i drugi su pregovarali o prenosu 100.000 hektara zemlje od naroda Kulin. Međutim, ugovor je poništen iste godine kada je britanska kolonijalna kancelarija izdala Proglas guvernera Bourkea u kojem se navodi da je sva neotuđena zemlja u koloniji bila prazna krunska zemlja, bez obzira na to da li je okupirana od strane tradicionalnih vlasnika zemljišta. Njegovo objavljivanje značilo je da će se od tada svi ljudi koji zauzimaju zemlju bez ovlašćenja vlade smatrati prestupnicima.
1836, Port Phillip je zvanično priznat kao okrug Novog Južnog Velsa i otvoren za naseljavanje. Glavno naselje, Melburn, osnovano je 1837. godine kao planirani grad po uputstvima guvernera Bourkea. Doseljenici iz Van Diemenove zemlje i Novog Južnog Velsa ubrzo su stigli u velikom broju, a do 1850. godine okrug je imao populaciju od 75.000 Evropljana, 2.000 domorodačkih stanovnika i 5 miliona ovaca. 1851, Port Phillip je odvojen od Novog Južnog Velsa kao kolonija Victoria.