NSW will become the first Australian state to welcome quarantine-free international travel once again, in a move that could further delay the opening up of the country's internal borders.

Premier Dominic Perrottet on Friday announced that all quarantine and isolation would be abandoned for fully vaccinated international arrivals who test negative before and after their flights.

But international tourism is not back on just yet, with Prime Minister Scott Morrison cautioning the reopening will only be extended to Australian citizens, permanent residents and their parents.

Tourism and travel operators on Friday welcomed the decision as a positive first step.

Dean Long, Chief Executive at the Australian Federation of Travel Agents, told AAP the decision marked an entry to the "long runway of recovery" for the travel sector.

Mr Long said COVID-19 would be around forever, and allowing Australians to return home and then opening up leisure and corporate travel for Australians was a "really important first step".

But he said it was not a watershed moment, with travel agents unlikely to get a revenue boost until the second quarter of 2022.

"We only get paid once that travel is taken," he said. "It's not like a cafe where they open up today and get revenue today."

CEO of the Tourism & Transport Forum Margy Osmond said the change was "about hope".

"It's about being positive and moving on."

But Ms Osmond cautioned that even once the federal government starts dispensing tourist visas, many people won't come until the country's internal borders open up.

Tourists want to see the Great Barrier Reef and the Barossa Valley as well as the Sydney Opera House, she said.

But the decision to ease open NSW's international border could mean the interstate borders stay shut longer.

The majority of states have blocked NSW travellers and many are considering home quarantine options for international travellers.

Queensland's Chief Health Officer Jeannette Young has already flagged border settings with NSW will be reviewed after the announcement.

Mr Perrottet conceded people in NSW will be able to travel overseas before they can travel to some states.

"People in NSW will be flying to Bali before Broome... (but) we need to rejoin the world," he said.

He said the move would help facilitate family reunions, by allowing those stuck overseas to return home via NSW.

Business Council chief executive Jennifer Westacott said other states and territories should act with the same "clarity and purpose" as NSW.

"We can't risk a situation that sees people free to leave and enter Australia but not move between states," she said.

Gabriel Metcalf, CEO of the Committee for Sydney, said Sydney was a global city and international travel was "especially important".

"It means we can open back up for international students, for tourists, and for business meetings. It means those of us with families overseas can reconnect," he said.

Mr Morrison flagged that skilled labour and international students would be the next groups welcomed into NSW.

That will be necessary to help the tourism industry prepare for international arrivals, Ms Osmond said.

The industry has lost over 600,000 direct and indirect jobs during the pandemic, and it will need skilled labour to cope with future demand, she said.