The restrictions ensured the Sydney foreshore, including popular vantage points such as the Opera House and The Rocks, were on Thursday night deserted, with no revellers or firework-watchers in sight.
The lively seven-minute fireworks display at midnight carried themes of love, unity and solidarity amid COVID-19, which has killed 909 Australians to date.
The Harbour Bridge before midnight was lit up with the words "we are one".
Sydneysiders mostly watched the fireworks on television, with a permit system established for the CBD only for those with pre-existing hospitality bookings.
Boats were permitted on Sydney Harbour with strict guidelines, while the children-friendly fireworks at 9pm did not go ahead.
Residents in Greater Sydney, including Wollongong, the Central Coast and Blue Mountains, were restricted to hosting five visitors in their homes, including children. The limit for outdoor gatherings was reduced to 30.
Backyard fireworks could be heard going off on Sydney's northern beaches, currently grappling with a 144-person COVID-19 cluster and a stay-at-home order that will linger in some suburbs until at least January 9.
And as midnight passed, backyard fireworks could be heard all across Sydney.
Central Melbourne was also mostly vacated on Thursday night, with a smattering of people in restaurants but parks and public spaces deserted.
The Victorian government urged people not to head into the Melbourne CBD on Thursday night unless they had a hospitality booking.
The city's new eight-person outbreak prompted authorities to cut indoor gatherings from 30 people to 15 from 5pm on New Year's Eve.
Wearing masks indoors was also made mandatory.
South Australians may have no more than 50 people at their house - whether indoors or outdoors - for New Year's Eve celebrations. A maximum of 200 people will be permitted at private outdoor gatherings.
Fireworks in Hobart went ahead but, like in Sydney, people were urged not to gather on the waterfront.
Darwin residents needed to register and wear wristbands to attend the city's two fireworks displays.
In marked contrast to the rest of the country, Perth's celebrations are to be close to normal, with two fireworks displays.
People in Australia must stay at least 1.5 metres away from others.
Please check the relevant guidelines for your state or territory: NSW, Victoria, Queensland, Western Australia, South Australia, Northern Territory, ACT, Tasmania.
If you are experiencing cold or flu symptoms, stay home and arrange a test by calling your doctor or contact the Coronavirus Health Information Hotline on 1800 020 080. News and information is available in 63 languages at sbs.com.au/coronavirus.