It continues south, narrowing back to a two-lane, single carriageway road south of Shepparton until Arcadia, where it widens again to a four-lane, dual-carriageway route and becomes Goulburn Valley Freeway, following the course of the Goulburn River and heading in a south-westerly direction past Nagambie eventually to reach the interchange with Hume Freeway on the northern fringes of Seymour, where it reverts back to a two-lane, single carriageway road as Goulburn Valley Highway and runs through Seymour, then heads in an easterly direction through the towns of Yea, Alexandra, Thornton, before eventually terminating in the centre of Eildon, the gateway town to the Lake Eildon region.

The road serves the fruit and vegetable growing areas of Goulburn Valley in Victoria, one of Australia's most productive agricultural regions.

[12] The last section, from Yarroweyah to the border with NSW just outside Tocumwal, was added in June 1983,[13][14] along Benalla-Tocumwal Road north of Murray Valley Highway.

[17] Construction on the first section to be converted into Goulburn Valley Freeway, 16 km from the interchange with Hume Freeway in Seymour to just south of Nagambie, started in January 1999;[18] this included the relocation of the Aboriginal Scar Tree, a dead tree bearing scars where wood had been cut for a shield or dish, in consultation with the local Taungurung Aboriginal People,[18] and who also attended the opening ceremony in a new south-bound rest area in April 2001.

The works involved duplication of 10 km of the existing Goulburn Valley Highway between the Murchison East deviation and the proposed Shepparton Bypass, just north of Ross Road, through Arcadia.

It incorporates four at-grade intersections, frontage access roads, a rest area with full facilities, and wire rope safety barriers.

[27] It was proposed that the Shepparton Bypass would be funded by Auslink 2 (2009–2014);[28] the 2017/18 State Budget allocated $10.2 million over three years to undertake preparatory works and land acquisition,[29] and a consultation was held with the community for its initial stage in 2018.

The current priority is Stage 1, a single carriageway with a lane in each direction extending from the Midland Highway west of Mooroopna to the Goulburn Valley Highway via an upgraded Wanganui Road in Shepparton North, a total distance of 10 km; the Federal Government has also contributed $208 million, for an estimated project cost of $260 million for Stage 1.

A realignment will bypass the small townships of Strathmerton and Yarroweyah and avoid dangerous bends south of the Murray River crossing at Tocumwal.