Thousands of anti-lockdown protesters gathered in Australia's largest city of Sydney on Saturday amid a deteriorating Covid-19 situation in the country.

New South Wales (NSW) Police Force accused the protest activity as unauthorised and said a high-visibility policing operation was launched in response to it, reports Xinhua news agency.

The protesters marched towards the downtown through the suburb of Haymarket, which had just moments earlier been declared a virus hotspot by the state's health department, according to a report by national broadcaster ABC.

"Officers from across Central Metropolitan Region, assisted by specialist resources, were deployed. So far during the operation, a number of people have been arrested," NSW Police Force said in a statement on Saturday afternoon.

Australia's most populous state of SW, with Sydney as the capital city, recorded on Saturday a new high of 163 new locally acquired cases of Covid-19, a jump from the previous day's 136.

Among the new local cases, 45 cases were infectious in the community while the source of infection for 76 cases is under investigation.

NSW Health Minister Brad Hazzard urged residents, particularly in southwestern Sydney, to abide by the stay-at-home rules as state police issued 246 penalty notices in 24 hours for people breaching restrictions.