A Sydney home order was issued five weeks ago as authorities tried to curb the spread of the new coronavirus, the Indian or delta variant.
The quarantine was scheduled to be lifted on July 30, but will remain in effect until August 28, as the number of Covid-19 cases continues to rise.
Officials reported 177 new infections in connection with the Sydney outbreak, which began in mid-June when an international flight crew driver became infected.
People living in the “hot spots” of a pandemic are urged not to leave their area. Those who live alone will be allowed to form a “lonely bubble” with another person.
The Prime Minister of New South Wales, Gledis Beredjikljan, said police were stepping up efforts to enforce quarantine rules and called on Sydney residents to report breaches.