Australian officials declared Sydney's northern beaches a coronavirus hotspot as a cluster of cases grew to 28 and triggered a return of domestic travel restrictions.

The outbreak follows a period of relative normality in the city after it proved a success in keeping a lid on the virus in recent months, AFP reported.

But on Friday hundreds of thousands of residents were urged to stay home as much as possible for three days and long queues formed outside Covid-19 clinics as health officials raced to contain the infection.

“If we get on top of this in the next two or three days, all of us will be able to have a much better Christmas,” Premier Gladys Berejiklian, leader of Sydney's state of New South Wales, told media.