Victoria will reopen to the Blue Mountains, Wollongong and parts of Sydney as the state eases its border restrictions for NSW.
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Premier Daniel Andrews confirmed 25 of Sydney's 35 local government areas will be downgraded from "red" to "orange" zones from 6pm on Monday.
The Blue Mountains and Wollongong will also be downgraded from red to orange, while 16 border towns will become green zones.
People travelling from an orange zone will need to apply for a permit online and get tested within 72 hours of their arrival in Victoria.
Mr Andrews said the local government areas of Blacktown, Burwood, Canada Bay, Canterbury-Bankstown, Cumberland, Fairfield, Inner West, Liverpool, Parramatta and Strathfield will remain red zones.
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"They will be designated red for not a moment longer than they need to be. We won't wait for all ten to be orange. It may be that some of them come off in a few days. Others may take longer," he said.
"I know that that is frustrating and challenging not to be able to provide a definite answer on that."
Victoria has recorded a 12th consecutive day without a local coronavirus case, with almost 14,000 tests processed in the past 24 hours.
However, a tennis player and three staff members have tested positive to COVID-19 in hotel quarantine. It brings the total number of active cases in the state to 33.
A total of 72 players are now isolating in their hotel rooms ahead of the Australian Open, which begins on February 8.
Three Australian Open charter flights, from Abu Dhabi, Doha and Los Angeles, have carried passengers who later tested positive.
The premier said none of the tennis players will receive "special treatment".
"I know that there's been a bit of chatter from a number of players about the rules. The rules apply to them as they apply to everybody else, and they were all briefed on that before they came, and that was the condition on which they came," Mr Andrews said
Meanwhile, a nurse and a police officer working at a medi-hotel in Melbourne's CBD tested negative to the virus after initially returning "weak positive" results.
The positive saliva swabs led to 41 other workers at the Holiday Inn on Flinders Street being stood down.
"Saliva tests are very reliable with negative results, but can return occasional false positives," a spokesman from COVID-19 Quarantine Victoria said.
The hotel is being used to quarantine COVID-positive returning travellers.
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