“States and territories will determine whether they proceed to make this an enforceable limit in the same way that the 10-person limit is already being enforced,” Morrison said.
The limit does not apply to members of the same household.
Australians over the age of 70 are also being advised to self-isolate at home “to the maximum extent practical”.
“This is for their own protection to limit their interaction with others in the community,” Morrison said.
Under the new social distancing measures, outdoor gyms, skate parks and boot camps will be closed from tomorrow.
The prime minister said Australians must stay home unless they are shopping for food, need medical care or for work or education purposes if they can’t work from home.
People are still allowed to exercise outdoors as long as it’s not more than two people.
It comes as the number of COVID-19 cases in Australia nears 4000, with 16 deaths from the virus.