Parents of Australian citizens and permanent residents will be classified as immediate family, allowing them to travel to Australia in states and territories that have reached 80 per cent double dose vaccination targets.
Prime Minister Scott Morrison made the announcement on Friday, saying it will be good news for many in the country.
"I know that will be very welcome news to Australians right across the country who were hoping to be reunited with their family members, their parents who are overseas," he told reporters.
Parents are currently not recognised as immediate family under COVID-19 travel rules, which means they can't enter Australia under exemptions to border restrictions.
In New South Wales, it will mean parents will be allowed to enter Sydney from 1 November if they are fully vaccinated. They will not have to undergo hotel quarantine.
"I want to stress that for the other states and territories and I have advised the premiers and chief ministers to this end, it is about Australian residents and citizens first," Mr Morrison said.
Campaigners have long been calling on the federal government to include parents as immediate family for inbound travel, with many critical of the restrictions imposed on their parents to enter Australia.
The issue has caused anguish and stress for many Australian citizens and permanent residents for over 18 months since the COVID-19 pandemic forced the closure of Australia's borders.
Many, including new mothers unable to be with their mums and dads after giving birth, have described the family separation as "soul-destroying".
There have been numerous protests against the restrictions across the country in the past 18 months, including one in August.Campaigner Alexandra Parker, who runs the We Need Our Village group that supports new mothers, described the development as "incredible".
Melbourne resident Emma Ashcroft with her mother, late grandmother and son. Source: Supplied
"Everything I've been fighting for - to have parents come here to provide that support in those crucial life-changing moments - it's going to happen!" she said.
Melbourne resident Emma Ashcroft said she was in disbelief and shock when she heard the announcement, saying it was a long-time coming.
"I started shaking and then I kind of couldn't believe it," she told SBS News.
Ms Ashcroft said she hoped it would push Victoria to follow NSW's lead to reach the double-vaccination target sooner. The state is estimated to reach the 80 per cent target on 31 October.
"My mum met my daughter when she was two weeks old for two weeks. And that's it. She hasn't seen my daughter since she's been four weeks old and she's nearly two now,"
"So just missing out on, you know, on all those, all those memories."
She hopes to catch up on lost time when she's finally able to reunite with her mum after nearly two years.
"I just feel like it'll be a really big hole in my life that's been filled, you know, the past few years, it's really hard to explain it but it just feels like a really big hole."