Federal Health Minister Greg Hunt says the stricter steps taken by Victoria in its deadly battle against COVID-19 make it one of the hardest days in the state's history but are "regrettably necessary".
Victorian premier Daniel Andrews has declared a "state of disaster" and tighter restrictions after another surge in infections and seven more deaths, saying the time for leniency "is over".
The state recorded a further 671 cases on Sunday, while the deaths of men and women aged in their 70s to 90s took its toll to 123 and the nation's to 208.
NSW meanwhile updated its mask usage recommendations after recording 12 new infections.
Victoria's upgraded restrictions in metropolitan Melbourne from Sunday evening include allowing only one person per household to shop and only one to exercise for an hour a day. Both activities must be within a 5km radius.
There will also be an 8pm-5am curfew over the six-week lockdown.
Regional Victoria will go to stage three restrictions from Thursday, which will see restaurants, cafes, bars and gyms close, while schools will return to remote learning across the state.
"These are big steps but they are necessary," Mr Andrews told reporters in Melbourne on Sunday.
He said he would announce business restrictions on Monday but assured supermarkets and other essential shops would remain open.
A special meeting of the nation's medical officers informed Prime Minister Scott Morrison and senior members of government that it backed Victoria's decisions.
"We recognise the further measures announced by the premier are regrettably necessary," Mr Hunt, who is also a Victorian, told reporters.
"We support them with a heavy heart but we do so because they will help save and protect lives in Victoria."
He said the government would provide $7.3 million in additional support for mental health.
The calling of a "state of disaster" will give additional powers to the police to enforce restrictions.
"The time for leniency, the time for warnings and cautions is over," Mr Andrews warned.
"Everyone knows the rules and you will be dealt with harshly because you should be."
NSW Premier Gladys Berejiklian said while authorities would not enforce mask usage in the state, the government had revised recommendations to address four specific circumstances.
As well as situations where social distancing is impossible, such as on public transport, masks should be worn by public-facing employees including hospitality and supermarket workers, worshippers and residents of suburbs near clusters.
The elderly and those with underlying health issues should also wear masks.
"We have been talking about masks for several weeks but obviously the persistent situation in Victoria gives us cause for alarm in terms of the potential for further seeding in NSW, and it is about risk mitigation strategy," Ms Berejiklian said.
Queensland reported one new coronavirus case, a young consular staff member returned from overseas.
Western Australian also recorded one new infection, also from a returned overseas traveller.
Premier Steven Marshall said South Australia would quickly impose stricter rules to separate itself from the growing threat of eastern states if required.
"We're very concerned about the unfolding situation in Victoria and we're very supportive of further restrictions being put in place in that state," he said.
Australian Associated Press