A NSW government plan to bring international students back to university campuses this year is being considered by the federal government.
Under the plan before the NSW Department of Premier and Cabinet, overseas students would be quarantined in Sydney using purpose-built housing.
The news comes despite Prime Minister Scott Morrison and Treasurer Josh Frydenberg saying Australia's borders will stay shut for the foreseeable future and ongoing pressure to bring home stranded Australians.
Mr Morrison said the Commonwealth was aware of the ambitious proposal.
"They're still a long way from landing this I should stress," he told Sydney radio 2GB on Thursday.
"But it's something that we're encouraging of but it's got to be done safely and we've got to be able to do it in a way that doesn't risk the great success we've had."
NSW Treasurer Dominic Perrottet hopes international students will be back in lecture halls and tutoring sessions by the second semester.
"This is about finding a way to bring students back but not at the expense of the weekly cap of Australian citizens arriving back in NSW," he told The Australian.
"If we don't address this issue then I believe we'll have an industry on its knees and one that will look elsewhere."
The international student market is worth $14 billion a year to the NSW economy.
Meanwhile, NSW is forging ahead with its COVID-19 vaccination roll-out with more than 800,000 jabs being administered so far.
A mass vaccination hub that opened at Sydney Olympic Park on Monday is capable of administering 30,000 jabs a week and Premier Gladys Berejiklian stressed she "would like to see us really work as fast as we can to get our population vaccinated".