Prime Minister Anthony Albanese and state and territory leaders agreed people with COVID-19 will no longer be subject to a five-day stay-at-home order, following Friday's meeting at Parliament House.

The change comes into effect from October 14.

But isolation periods will still apply to employees in vulnerable settings such as hospitals and aged care.

The decision to eliminate the mandatory isolation period also signals the end of pandemic leave payments for affected workers from October 14.

The payments remaining for workers in vulnerable settings will be split 50-50 between the Commonwealth and the states and territories.

"We want a policy that promotes resilience and capacity-building and reduces a reliance on government intervention," Mr Albanese told reporters in Canberra.

"It was a unanimous decision by the national cabinet today and had the support of all premiers and chief ministers."

Australia's Chief Medical Officer Paul Kelly said the emergency response phase to the coronavirus pandemic was now "finished."

But while COVID-19 case numbers are relatively low it wasn't over.

"We will almost certainly see future peaks of the virus ... as we have seen earlier in this year," Professor Kelly said in Canberra.

"It is a time, though, now to consider that we have other things that we can do to protect those most vulnerable people and that is absolutely our key aim."

Prof Kelly said removing the rules was reasonable.

"It is time to move away from COVID exceptionalism, in my view, and think about what we should do to protect people from any respiratory disease," he said.

"We can't look at isolation by itself. We need to look at those measures and the protections we have as well as other protections. It is important that we keep an option for a change to these settings in the future."

Mr Albanese defended the decision to end pandemic leave payments, saying the time was right.

"The flu has existed, and health issues have existed, for a long period of time and the government hasn't always stepped in to pay people's wages while people have health concerns," he noted.

NSW Premier Dominic Perrottet, whose state continues to record more weekly infections than others, said people sick with COVID-19 should still get tested and stay home.

"This is a day where we move to a more caring and compassionate approach where people look out for one another," he said following national cabinet.

"We need to move to that approach ... as we have with other infectious diseases in the past as well."

The Australian Chamber of Commerce and Industry said the decision was common sense.

"Today, Australia has turned a corner in its approach to living with the virus," chamber CEO Andrew McKellar said.

"Importantly, these changes balance the relaxation of restrictions while also protecting the most vulnerable."

Australian Retail Association CEO Paul Zahra said it would be a relief for shopkeepers.

"Today's decision will be a welcome relief for businesses who've been unable to trade at their full potential due to staff absence," he said.

Not everyone who tests positive for COVID-19 has symptoms and most Australians are now fully vaccinated against the potentially fatal virus.

However, Australian Medical Association president Steve Robson blasted the leaders who advocated for the scrapping of isolation measures.

"People who are pushing for the isolation periods to be cut are not scientifically literate and are putting the public at risk and they need to understand that," he told the ABC.

In the past week, there were almost 40,000 new cases of COVID-19 recorded nationally and 282 fatalities.

The total death toll since the start of the pandemic in early 2020 is more than 15,000.

WEEKLY VIRUS DATA BY JURISDICTION

* NSW: 12,592 new cases, 82 deaths

* Victoria: 9458 new cases, 59 deaths

* Queensland: 8061 new cases, 77 deaths

* WA: 4662 new cases, 10 deaths

* SA: 3104 new cases, 17 deaths

* ACT: 616 new cases, one death

* NT: 339 new cases, two deaths

* Tasmania: 732 new cases, one death

Australian Associated Press