The SCG has been stripped of the New Year's Test with Melbourne to host back-to-back matches between Australia and India.
Cricket Australia officials have been in talks throughout the Boxing Day Test, weighing up whether the next match could remain in Sydney as scheduled.
But the CA board has determined the COVID-19 outbreak in Sydney's northern beaches has made that untenable.
It means the MCG will host a second Test in a summer for the first time since 1981-82.
On the other hand, it will be the first time since 1971-72 an official Test has not been played at the SCG during an Australian cricket season.
But that summer saw a Rest of the World XI play Australia after the Proteas' tour down under was cancelled due to political turmoil in South Africa.
Crowd numbers have been capped at 30,000 per day for the second Test at the MCG and will likely remain at that figure with the game locked in for Melbourne.
Queensland's border closure to NSW added to the complications surrounding the third Test remaining in Sydney.
The fourth and final Test match will be played at the Gabba in Brisbane, starting on January 15, four days after the scheduled end of the third Test.
NSW premier Gladys Berejiklian criticised Queensland counterpart Annastacia Palaszczuk over the border closure.
"We are willing to have it here and they (CA) are pleased with the plans we have put forward," she told reporters.
"But it is out of our hands given it is the Queensland government that is creating a bit of difficulty for them (CA)."
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