Victoria notes 397 new cases; and 124 cases are linked to Fawkner

Media playback is unsupported on your device                  Media caption'Like being in prison: The public housing tower residents confined under police lockdown

Victorian Premier Dan Andrews on Saturday admitted further lockdown rules could prove a "circuit breaker" for the continued Covid-19 cases, and that the state government is working through the details.

NSW on Saturday confirmed 17 new cases, coinciding with the closure of several Sydney venues for deep cleaning and contact tracing after being linked to coronavirus.

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.

Classified by Victorian health authorities as "community transmission", they are cases where, despite the efforts of contact tracing teams over several days, or sometimes weeks, they cannot trace the infection back to the "index case" or original source. Meanwhile, the rest of the state will be placed under the stay-at-home restrictions that metropolitan Melbourne is now under. Both activities must be within a 5km radius.

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.

"I understand this will a big step for some", Mr Andrews said. According to Prime Minister Scott Morrison, the flare-up of the virus in Sydney is under control, but the spike in cases in Melbourne remains a challenge.

Employers found to be discouraging masks reportedly faced fines of $9913.

Australia's Health Minister Greg Hunt said at a televised briefing the federal government supports the measures with a "heavy" heart.

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The sweeping new restrictions limit the time Melbourne residents may spend on outdoor exercise and essential shopping.

"Everyone knows the rules and you will be dealt with harshly because you should be".

But masks and face coverings were recommended as an additional physical barrier.

"Forty-nine doesn't necessarily seem such a large number but 49 mysteries when it could be much more than that because you can't find who that original case was, that is a significant concern to us", he said.

A man wearing a mask walks along a quiet street in Melbourne.

Queensland reported one new coronavirus case, a young consular staff member returned from overseas.

COVID-19 cases in Victoria have spiked in the past month to be far higher than during Australia's initial coronavirus wave, which peaked in late March.

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