Victoria has announced it will shut the border to Greater Sydney, declaring it a 'red zone' as cases rise.
From 11:59 on Sunday, all residents from Greater Sydney and the Central Coast will have to enter two weeks quarantine.
"Without mandatory mask rules and stay at home orders across Sydney, our government and state's health authorities do not have confidence that the situation remains safe," a press release said.
Tighter restrictions in Sydney
Thirty new coronavirus cases have been recorded in New South Wales (NSW) overnight, Premier Gladys Berejikilian has announced, 28 of which are directly linked to a growing cluster on Sydney's Northern Beaches.
Berejikilian told a news briefing on Sunday that greater Sydney will now be placed under tighter restrictions, with no more than 10 guests allowed in a household, while social distancing curbs have also been placed on hospitality venues.
Sydneysiders are also being urged to wear masks.
"I am asking, and the Government is asking all residents of the greater Sydney area to wear masks, at least for the next few days until we revisit this issue on Wednesday," NSW Health Minister Brad Hazzard told reporters.
Of the 30 new COVID-19 cases reported on Sunday, two remain under investigation. The infected people are residents of the Northern Beaches, indicating they are likely linked to the cluster.
The new cases continue to raise questions over a potential trans-Tasman travel bubble, with the New Zealand Government saying one would only proceed should Australia go 28 days without a local case.
In a statement on Sunday, New Zealand's Ministry of Health said it was closely monitoring the situation in NSW.
"Ministry officials are in regular contact with Australian officials," the statement said.
"Officials in New Zealand have already increased public health and testing measures relating to aircrews to further strengthen our country's defence against COVID-19."
A New Zealand Government spokesperson told Newshub it was too early to make any decisions about a potential travel bubble.
"Commencement is dependent on no significant change in the circumstances of either country.
"Decisions on whether or not to proceed with a travel bubble will occur in the new year and we will assess the situation at that point.
"We're monitoring the situation closely, but it's too early to make any decisions based on the current community cases in New South Wales."