Two Australian apartment blocks have been placed under strict lockdown with residents barred from leaving on Tuesday, as authorities stepped up efforts to curb a fast-growing coronavirus outbreak.

Police were posted outside an apartment block in Sydney's Bondi neighbourhood, where nine people have tested positive for the virus, with movement in and out of the building restricted. 

Sydney's five million residents are currently in their third week of a partial lockdown as authorities try to stamp out the spread of the virus in the community.

Residents in Australia's largest city are allowed to leave home for exercise, essential shopping, work or health reasons, but are encouraged to remain at home.

Tougher restrictions are placed on people who have visited locations that are declared a virus hotspot, which may include mandatory 14-day quarantine.

Australia's latest COVID-19 outbreak began in mid-June and has since grown to 767 cases.

An entire apartment block in Melbourne was also placed under isolation for 14 days, after removal workers who visited from Sydney tested positive.

Authorities are now asking Australians living in other apartment buildings to wear a mask when in common areas. 

"When you're in apartment buildings, we're not wanting you to congregate in any shared spaces," said New South Wales chief health official Kerry Chant.

"We are really requiring under a public health order that you wear masks when you're transiting through common areas." 

Residents in one southwest Sydney neighbourhood, where the virus is currently spreading most quickly, are now required to get tested every three days if they leave the area for work. 

Under 10% of Australians have been fully vaccinated, leaving the population highly vulnerable to the quick-spreading Delta variant. 

Sydney's lockdown had been scheduled to end on Friday, but an extension is now looking likely, despite a drop in new infections to 89 in the past 24 hours.