International tourists will be allowed to come back to Australia from February 21.
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After the almost two year ban on foreign travellers, fully vaccinated tourists will be able to arrive in a matter of days.
The decision comes following a meeting of cabinet's national security committee on Monday.
While the international borders have been opened since late 2021, entry has only been allowed for citizens, permanent residents and their families, with it later expanded to international students, backpackers and migrant workers.
Prime Minister Scott Morrison said the move would be a welcome boost to the tourism sector.
"I know the tourism industry will be looking forward to that," he told reporters in Canberra.
"The condition is you must be double vaccinated to come to Australia. That's the rule. Everyone is expected to abide by it."
State-based caps on quarantine will continue, with the number still being determined by state and territory governments.
While health officials are debating whether to change the domestic definition of fully vaccinated to include having had a booster shot, Mr Morrison said two doses would be enough for international travellers to arrive.
The prime minister said the definition would not be changed for tourists to enter the country.
"We've been very careful looking at the impact, particularly when Omicron hit, and how that would flow through," he said.
"But the fact is here in Australia, the variant is here, and for those who are coming in who are double vaccinated they don't present any greater risk than those who are already here in Australia."
While the country's aged sector has been grappling with large numbers of Omicron cases and deaths, the prime minister also announced up to 1700 defence force members would be deployed to residential facilities to assist staff.
Health experts have previously indicated Australia's virus situation was improving, with Omicron cases across the country plateauing.
Mr Morrison said the decision to reopen borders to tourists was sensible, with intensive care cases in hospitals declining across the country.
Health Minister Greg Hunt said hospitalisations from the virus were down 27 per cent since the peak of the Omicron wave.
ICU admissions were also down by 35 per cent, while the number of patients on ventilators is down by 40 per cent.
Tourism operators had been experiencing a downturn due to the virus and the loss of foreign visitors, and had been calling on the government to lift the ban on tourists arriving.
Opposition home affairs spokeswoman Kristina Keneally said while the border reopening would be great to see, a clear plan was needed.
She wants to see guarantees of border officials being able to properly check vaccination statuses, as well as measures for airports to cope with the demand once tourism resumes.
"What I'm pointing to are the practical steps that have not been done by this government and the problems that will arise if they don't do the hard work."
Meanwhile, the first shipment of Novavax is set to arrive in Australia from Singapore later on Monday.
Three million doses of the vaccine will arrive in the country ahead of the start of its rollout on February 21.
On Monday, 14 COVID-19 deaths were reported in NSW, and seven fatalities in Victoria, while there were 19 in Queensland, and one in both the ACT and Tasmania.
The latest case numbers showed there were 7347 new infections in NSW and 8275 in Victoria, while Queensland registered 4701 cases, Tasmania had 443 and the ACT had 299.
Australian Associated Press
