Travellers, including returning Australians, arriving in New South Wales will now have to pay AU$3000 towards the cost of their quarantine.
The move was announced on Friday by the state premier Gladys Berejiklian.
"Australian residents have been given plenty of time to return home, and we feel it is only fair that they cover some of the costs of their hotel accommodation," Ms Berejiklian said.
The new rules apply to anyone who boards a flight after midnight on July 12, regardless of when they arrive in NSW, the Sydney Morning Herald reports.
The charges will start at AU$3000 for the first adult and AU$1000 for additional adults. Children aged three and over will be charged AU$500 per child.
Travellers will be invoiced at the end of their quarantine period.
The SMH reports over 35,000 people have passed through quarantine since March 29 with the bulk of them transiting through Sydney.
In June New Zealand Prime Minister Jacinda Ardern told The AM Show it was not clear if the Government could legally charge people for quarantine.
"This is the only place many people can legally reside, so if you put up a wall and say 'you cannot come home' or place up barriers to coming home, that does have legal implications for us. It's not a simple thing to work through."
Ardern defended Kiwis leaving it this late to come home, saying many would only have decided to return after losing their jobs overseas, in places where they might not have support systems. Others would be coming back now for family reasons that might not have existed in March.
She said any charge on returning Kiwis would not be intended as a deterrent.
