The declaration applies to all 30 local government areas in greater metropolitan Sydney and comes amid increasing concerns over a cluster of virus infections linked to the Crossroads Hotel in Casula.

"This means that from Friday, if there are any arrivals to the Territory from Sydney, or who have been in Sydney in the previous 14 days, they will be directed into mandatory, supervised quarantine and charged $2500," Mr Gunner said.

Similar arrangements are also in place for travellers from Victoria with anyone arriving from those regions to face 14 days in quarantine at their own expense.

However, the NT will lift border restrictions for people from other states on Friday.

Mr Gunner said the Territory's decision was not just based on the current situations in Victoria and Sydney, but on how bad things could get.

"For those who are inconvenienced by this decision, I am sorry but it is just the way it is," he said.

"I know some people were looking forward to having family and friends from Sydney here, but that can't happen yet.

"I know some people have put off coming here so they don't have to quarantine but that won't be happening either.

"It does suck, but it is the way it is."

Australian Associated Press