Prime Minister Scott Morrison says the advice not to hold mass gatherings involving more than 500 people does not apply to schools, universities or public transport.
The Federal Government has advised all "non-essential, organised gatherings" of 500 people or more be cancelled from Monday to limit the spread of COVID-19.
Prime Minister Scott Morrison made the announcement on the advice of Australia's chief medical officer Brendan Murphy and after meeting with state and territory leaders on Friday.
He said the advice does not apply to schools, universities or public transport.
Mr Morrison said he still planned to attend a rugby league match on Saturday night.
"The fact that I would still be going on Saturday speaks not just to my passion for my beloved (Cronulla) Sharks, it might be the last game I get to go to for a long time. That's fine. In the future, I suspect, we might be watching them on television, and that's okay as well."
Mr Morrison said the advice from Monday was part of a stepped response.
"We are not of great concern right now in terms of where those gatherings might be today, but in the weeks ahead, this will change," he said.
Reconsider overseas travel
The government is also urging Australians to reconsider any foreign travel.
"We have also decided through the Department of Foreign Affairs and Trade that we now advise all Australians to reconsider your need to travel overseas at this time, regardless of your destination, age or health - if your travel is not essential, consider carefully whether now is the right time," the prime minister added.
"We are effectively putting in place what is called a level three travel advice for travel of Australians overseas. This is done to protect their health and to limit their exposure."
As part of the government's response, a "national cabinet" is also being established with regular meetings to coordinate a unified response to Covid-19.
Chief medical officer Professor Brendan Murphy is reassuring Australians that all measures are precautionary.
"This is a precautionary measure on the basis of the numbers slowly increasing over the course of the last week in Australia," he said.
"We have seen increases in numbers every day, and we will feel there will be such a point over coming weeks that it is time to take precautionary advanced measures to limit those large events where the incidents of transmission can be supported."
On the potential for further escalations in the governmental response, NSW Premier Gladys Berejiklian said the COVID-19 situation remains an "evolving" one.
"If we feel that anybody's health is compromised, there's a great risk to the community, we will take those decisions," she said.
Ms Berejiklian's Victorian counterpart, Daniel Andrews, said state leaders are unified in working together to combat the health issue.
Shockwaves through major sports events
The advice comes as sporting leagues around the world consider the future of their seasons.
Officials have already announced the cancellation of the Australian Grand Prix, two days before the race was set to go ahead in Melbourne.
Cricket Australia has confirmed Australia’s three-game ODI series against New Zealand will be played without spectators at the Sydney Cricket Ground and in Hobart.
In the United States, Broadway has been closed, the NBA season cancelled, and National Hockey League, Major League Baseball and the Coachella music festival all postponed.
Ireland will also shut schools, universities and childcare facilities until 29 March and restrict mass gatherings.
Spain's La Liga, the Dutch Eredivisie, Portugal's Primeira Liga and USA's Major League Soccer have also been suspended over coronavirus concerns, however Australia's peak men's and women's football competitions will continue this weekend as scheduled.
In Italy, the government has imposed a blanket closure of restaurants, bars and almost all shops except food stores and pharmacies.