The ACT will remove travel restrictions with the Cumberland local government area at 3pm Friday, meaning Canberra will have open borders with all of NSW.
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Canberrans can once again travel freely to all of NSW and will not be required to quarantine on return, following a further relaxation of the coronavirus border ban.
Anyone currently in quarantine in the ACT on return from the western Sydney area will no longer be required to quarantine.
Chief Minister Andrew Barr said about 20 people were in that position.
The number of people in quarantine in the ACT reached a peak of almost 8000 earlier this month amid restrictions on travelers from parts of NSW and greater Brisbane.
Mr Barr confirmed the ACT was now ready to accept its next repatriation flight, which will arrive from India in early February. A further flight is scheduled for March.
The Northern Beaches LGA and Canterbury-Bankstown LGA will also be removed from the current list of areas of risk for high risk settings, such as hospitals and aged care.
Only Cumberland LGA and Blacktown LGA remain as areas of risk for those settings. Anyone who has visited those LGAs should not visit or work in a high risk setting for 14 days after leaving the area.
Chief health officer Kerryn Coleman made the announcement on Friday morning thanks to the "significantly improved situation" in Sydney.
NSW has not reported a locally acquired case of COVID-19 for 12 days.
ACT Health said there was also a small number of exposure locations in the past 14 days which means the risk of an undiagnosed case in NSW is very low.
"Since December 18, 2020 ACT Health has also processed over 4200 exemption applications for essential travel and other critical needs," she said.
"This has been a big effort for many people. We have a dedicated workforce and a strong and vigilant community that has come together.
"While the situation across Australia is encouraging, we must all continue to follow the public health advice to keep the ACT community safe from COVID-19."
The update follows news that a busload of tourists from the Cumberland LGA area allegedly visited Parliament House on Tuesday, while the area was still banned from travel to Canberra.
Investigations are ongoing but ACT Policing confirmed no infringements had been issued early on Friday.
Mr Barr expected police to provide an update to the public on Friday or over the weekend.
Health Minister Rachel Stephen-Smith said on Tuesday Dr Coleman believed the risk to the public was very low.
"Public health directions are there for a very good reason" Ms Stephen-Smith said.
"When people are asked not to travel to a particular area or they are asked to quarantine, or required to do so by a public health direction, we expect people to abide by that."
Anyone caught flouting ACT's COVID-19 restrictions can face fines of up to $8000.