Melbourne celebrates 181st birthday

Melbourne is celebrating its 181st birthday, with the city set to celebrate in historical style.

Melbourne established its first permanent settlement on 30 August 1835 when settlers on the ship Enterprize sailed from Van Diemen's Land (Tasmania) to the north bank of the Yarra River.

Melbourne Day celebrations will see Lord Mayor Robert Doyle hoist the city's flag at 9am, with people in period dress channelling the first settlers in a re-enactment.

Daddy Cool frontman Ross Wilson and former trumpet player from Hunters and Collectors, Jack Howard, will headline a free lunchtime concert at Federation Square at 2pm.