“These updates to arrangements for the Australian Open will mean that fans, players and the workforce can look forward to a terrific Covid-safe event,” Victoria state tourism minister Jaala Pulford said in a statement.
A similar cap was in place during last year’s tournament at the sprawling Melbourne Park complex, before a snap five-day lockdown in the city to contain a new coronavirus outbreak saw spectators banned.
Matches continued in silent stadiums and fans were eventually allowed back in reduced numbers at what was the first Covid-era Grand Slam to welcome large groups of spectators.
Earlier Thursday, Victoria reported a record 953 Covid patients in hospitals, with more than 220,000 active cases across the state.
All staff and players at the Australian Open must be vaccinated against coronavirus and while the vast majority are, world number one Novak Djokovic is not, sparking a global incident.
The world number one arrived in Australia a week ago claiming a vaccine exemption because of a positive PCR test result on December 16.
Border agents rejected his exemption saying a recent infection was an insufficient reason, tore up his visa and placed him in a detention centre.
But the vaccine-sceptic Djokovic’s high-powered legal team dramatically overturned the visa decision in court on Monday on a procedural matter related to his airport interview.
Immigration Minister Alex Hawke is currently considering whether to cancel the visa again.