Australia is set to trial home quarantine for fully vaccinated overseas arrivals who will still be required to spend 14 days in isolation.
South Australia will host the pilot scheme based around arrivals from countries with low rates of coronavirus infection.
Premier Steven Marshall indicated his state was keen to be involved at a national cabinet meeting on Friday.
"This is an important development," Prime Minister Scott Morrison told reporters in Sydney.
"It's trialling out these new quarantine arrangements which will take significant pressure off, if it's successful."
No time frame has been established for the pilot, which will be fully transparent to all states and territories.
That would allow other jurisdictions to implement similar schemes.
The ACT has allowed diplomats, government officials and the prime minister to quarantine at residences during the pandemic.
But the territory government is reluctant to immediately expand the program to the general population.
National cabinet also discussed overseas arrivals caps, which will be halved in five days.
Foreign Minister Marise Payne told the ABC the reduction would be in place until August 31 despite Mr Morrison previously stating it would be in place until at least the start of next year.
The government has scheduled 29 facilitated flights to return about 4000 people stranded overseas to the NT's Howard Spring quarantine centre each month.
From next Friday, all arrivals into Australia will have to officially declare their vaccination status.
Mr Morrison said the move would provide information to states about how to manage future quarantine arrangements.
For people leaving Australia, the federal government will link its strong preference for people to be vaccinated to granting travel exemptions.
Mr Morrison said that would reduce personal and community risk.
"As we know COVID is riddled through many countries around the world and many of the places Australians would be travelling to," he said.
The Australian Border Force commissioner will take into account people who are not yet eligible or can't take the vaccine for medical reasons.