Australia's federal and state governments on Friday agreed to halve the number of people allowed into the country each week in response to the widespread Covid-19 outbreaks.

Prime Minister Scott Morrison announced on Friday that the international arrival cap will be cut by 50 per cent after a National Cabinet meeting with state and territory leaders, reports Xinhua news agency.

It means the country will accept only about 3,000 people a week.

It comes as much of the country fights outbreaks of coronavirus that started with leaks from hotel quarantine, with more than 10 million Australians subjected to lockdown measures.

"We have seen breaches occur, predominantly as a result of infection control procedures and human error and so on," Morrison said.

"Those issues need to continue to be strengthened, so simply reducing the caps doesn't necessarily provide a fail safe.

"But because of the particular virulency of the Delta strain, it is believed that is a prudent action while we remain in this suppression phase of the virus," he noted.

The National Cabinet also agreed to a four-phase "pathway out of Covid-19" with a goal of treating it like any other infectious disease.

The first phase of the pathway will include a trial of alternative quarantine measures, including home quarantine, for fully vaccinated international arrivals in Australia.

Under the second phase, which will begin when Australia hits an undetermined vaccination target, inbound passengers caps will be restored for unvaccinated returning travellers and there will be larger caps for the vaccinated ones.

"Our measures may include to ease restrictions on vaccinated residents, such as lockdowns and border controls," Morrison said.

"Lockdowns would only occur in extreme circumstances to prevent escalating hospitalization and fatality," he said.

"We would be allowing a capped entry of student and economic visa holders, subject to quarantine arrangements and availability."

Phases three and four will further ease travel restrictions.