Police officers walk past the Sydney Opera House in Sydney. AFP

Elated Sydneysiders celebrated the end of almost four months of coronavirus lockdown on Monday, allowing COVID-19 vaccinated locals to enjoy new freedoms.

From midnight life, restaurants and cafes began throwing open their doors to anyone who could prove they were vaccinated.

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Sydney's more than five million residents were subjected to a 106-day lockdown, designed to limit the march of the highly transmissible Delta variant.

Diners sit to eat at a food court on the first day of eased restrictions for vaccinated patrons in Sydney. Reuters

With new infections now falling — New South Wales state recorded 496 cases on Monday — and more than 70 per cent of over-16s fully vaccinated, the city is dusting off the cobwebs.

With the once-stuttering vaccine rollout gaining momentum, Australia is planning a staggered return to normal even as its biggest cities grapple with an outbreak of the highly infectious Delta variant.

Across the city, shaggy-haired customers lined up outside hairdressers to get eyebrow-raising home cuts and dye jobs repaired.

People filter into the city after more than 100 days of lockdown in Sydney on Monday. AP

"I couldn't wait to be in here to get the hair done," said Brett Toelle, a salon customer in Surry Hills whose last trim was 15 weeks ago. "That's the longest time I've ever been without a haircut."

For many, the end of lockdown was a chance to get into the shops.

Further restrictions will lift when the state hits the 80 per cent and 90 per cent levels, including the return of international travel.

Customers receive haircuts at a city centre barber shop on the first day in Sydney, Australia, on Monday. Reuters

For most of the pandemic, Australia successfully suppressed infections through border closures, lockdowns and aggressive testing and tracing.

But the Delta variant put paid to any dream of "Covid-zero", at least in the largest cities of Melbourne and Sydney which are now pivoting to "living with Covid".

Australia and neighbouring New Zealand have taken conservative approaches to reopening even though both countries have recorded only modest numbers of infections and deaths by global standards, during the pandemic.