Millions in Sydney began one of the country's harshest lockdowns since the pandemic began on Friday after nearly five weeks of increasingly tough restrictions failed to quell an outbreak of the highly infectious Delta variant.

Although cases dipped for the first time in nearly a week, state Premier Gladys Berejiklian warned cases could again rise due to the growing number of people positive with the Delta strain moving around in the community.

"We are expecting to see those numbers bounce around," Berejiklian told reporters in Sydney.

New South Wales reported 170 new local cases, most of them in the state capital Sydney, down from a record high of 239 set a day earlier. Of the new cases, 42 spent time in the community while infectious and 53 remained under investigation.

Berejiklian also implored people to avoid attending an anti-lockdown protest planned for Saturday in Sydney, warning they may be giving their loved ones "a death sentence".

Thousands of people joined an anti-lockdown protest in the city last weekend, drawing condemnation from police and politicians who labelled it a potential "superspreader" event.

As the city of five million heads into its sixth week of an extended lockdown, due to run until Aug. 28, the tougher new rules will affect eight local council areas, where most new infections have been reported.

More than two million people must stay within 5 km (3 miles) of their homes and have to wear masks when they step outside.

Police have been given sweeping new powers to close businesses flouting rules, while the military will begin assisting police with ensuring compliance with restrictions from Monday. Members of the military, who won't be armed and will be under the command of the state's police, will undergo training this weekend.

Officials are increasingly concerned about the strain on healthcare systems with hospitalisations and deaths expected to rise from the fast-moving Delta variant.

A total of 187 cases are in hospital, with 58 in intensive care, 24 of whom require ventilation. Thirteen deaths have been recorded so far in the latest outbreak.

Later on Friday, the country's national cabinet - the group of national and state leaders - will meet to discuss the country's exit strategies from the pandemic.

Australia has handled the coronavirus crisis much better than many other developed countries, with just over 34,000 cases and 923 deaths, but has been among the lowest in administering vaccines.

With about 18% of people aged over 16 fully vaccinated, Australia's immunisation drive hit several roadblocks due to changing medical advice for AstraZeneca doses over blood clot concerns and supply constraints for Pfizer shots.

Queensland state, meanwhile, is on alert after a 17-year-old school student contracted the virus, baffling officials.

"(This) is quite concerning because I'm struggling to understand how she has acquired it," state Chief Health Officer Jeanette Young told reporters.