Millions of Sydney residents will spend another month in lockdown, authorities announced on Wednesday, citing a still-fast-growing coronavirus outbreak and stubbornly low vaccination rates.

Australia's biggest city had been due to exit five weeks of lockdown on July 30, but the restrictions will now remain in place until August 28 as case numbers continued to climb.

"I appreciate personally what we're asking people do for the next four weeks but it is because we want to keep our community safe and want to make sure we can bounce back as quickly as possible," New South Wales State Premier Gladys Berejiklian said.

Officials announced 177 new cases linked to the Sydney outbreak, which began mid-June when a driver for an international flight crew contracted the virus.

People living in hotspots have been urged not to leave their neighbourhoods, but those living alone will be allowed to create a "singles bubble" with another person.

During the lockdown, Sydney residents can leave their homes only for exercise, essential work, shop for necessities such as food, and medical reasons.

In recent weeks, police have doled out fines to those violating the restrictions.

Berejiklian said police would step up compliance efforts, while imploring Sydneysiders to report others breaking the rules.

"We really need people to do the right thing at all times. Do not let your guard down," she said.

The announcement came as Melbourne awoke to the end of its fifth virus lockdown, after beating the Delta variant for the second time in recent months.

It was a victory won through "determination and hard work", according to Victoria state premier Dan Andrews.

They were among the roughly 8 million people in Victoria and South Australia states who exited lockdown overnight after local outbreaks of the highly contagious variant were contained.

Johnny Sandish, who owns a cafe in central Melbourne, said his business was under major financial pressure and the first morning of post-lockdown trade was quieter than expected.

"We’re losing a lot of money, almost going broke,” he told AFP.

"There’s no money coming in the business, only going out.”

Australia was lauded for its early pandemic success, after slamming shut its international borders and moving quickly to quash COVID-19 clusters.

But with a largely unvaccinated population, it has struggled to respond to the Delta variant, which has repeatedly sent cities into lockdown.

Melbourne musician Dante Zawadzki-Colliton said he was happy to be out and about after two weeks stuck at home, but the city’s frequent shutdowns had taken their toll.

 "Having to adapt to being locked inside and quickly assimilating to the outside is a struggle and very exhausting,” he told AFP.

About 13 per cent of Australians have been vaccinated, with low supplies of Pfizer-BioNTech shots and scepticism about the AstraZeneca jab slowing the rollout.

The country has recorded more than 33,000 infections and 921 COVID-related deaths in a population of 25 million.