Prime Minister Scott Morrison announced on Monday a range of fully-vaccinated visa holders will no longer be required to secure an exemption to travel into the country.
Those eligible for the rule change will include skilled migrants, international students, humanitarian as well as working holiday maker and provisional family visa holders.
Mr Morrison said their return marked an important step forward in Australia's recovery.
The return of skilled workers and students to Australia is a major milestone in our pathway back, he told reporters.
It's a major milestone about what Australians have been able to achieve and enable us to do.
The federal government has estimated 200,000 migrants holding these visas are expected to take up the offer between December and January.
It has been nearly two years since foreign nationals have been able to come to the country without having to secure a government exemption and enter mandatory quarantine.
While Australia's international borders have been open since the beginning of November, only fully vaccinated citizens, permanent residents and their families have been able to travel to the country without quarantining.
Under the new rules, the visa holders must have received a vaccine approved by the Australian Therapeutic Goods Administration and provide proof of their vaccination status.
They will also be required to present a negative COVID-19 PCR test within three days of departure.
The visa holders will have to comply with the quarantine requirements in the state or territory upon their arrival.
It's big news for people like chef Mauricio Salazar who after five years in Australia became stranded in his home country Colombia, when the nation shut its borders.
I miss so much being in Australia, I was looking at flights last week, it's such a big surprise, he told SBS News.
I'm really looking forward to [going] back to what I love.
SBS News has been told the changes also mean that Afghans seeking humanitarian visas will have more opportunities to seek resettlement in Australia.
Mr Morrison said the group were considered the highest priority in the refugee and humanitarian program.
Business groups and some states have also been urging a dramatic increase in migration in order to fill critical skills shortages and support the nation’s economy.
Universities Australia chief executive Catriona Jackson has also said around 130,000 international students remain outside Australia.
Senate leader and Finance Minister Simon Birmingham said he expected international students would be back for the start of the 2022 university year.
Our intention is to keep progressing as quickly as we can - whilst doing so as safely as we can, he told reporters.
[This] will enable us to move into the next stage of reopening to international students ... [and] to get essential workers back into the country.
The impending announcements come after Australia welcomed tourists from Singapore on Sunday, following the start of a quarantine-free travel bubble between the two nations.
Australia is also welcoming back fully vaccinated citizens from Japan and the Republic of Korea from 1 December.
Under these arrangements, citizens of Japan and the Republic of Korea who hold a valid Australian visa will be able to travel from their home country quarantine-free without needing to seek a travel exemption.
But there remains no wider decision on the return of tourists.
Treasurer Josh Frydenberg said allowing more people to return to Australia from overseas would help bolster the economy.
We want to allow skilled migrants to come to our country as well as international students sooner than later, Mr Frydenberg told Sky News.
International students are worth some $40 billion to our economy, and we know that there are workforce shortages out there and skilled workers can play a key part.
The changes follow ongoing advocacy from visa holders about the personal cost of being unable to enter Australia since the border closure was imposed in March last year.
