New South Wales premier Gladys Berejiklian announced the "difficult" decision, telling the city's population of five million it was time to "bunker down"
Meanwhile, there are signs that Australians are tiring of on-again-off-again restrictions that have marked pandemic life, although compliance with lockdown rules is still widespread
Rainfall records were forecast to continue tumbling in the coming days as the deluge spreads into the state's northwest, and further north into Queensland state.
All arrivals enter mandatory hotel quarantine on their arrival, which Australia credits as central in it avoiding high coronavirus numbers compared with other developed nations.
Australia has avoided the worst of the pandemic due to border closures, lockdowns, widespread testing and social distancing. It has recorded a total of around 28,100 infections.
"Everyone in greater Sydney needs to be on high alert," New South Wales (NSW) state Premier Gladys Berejiklian told a news conference on Friday in announcing 10 new cases.