Queensland has started work on a COVID-19 quarantine camp without federal government support, as it halted hotel quarantine for interstate travellers.
The state has paused hotel quarantine for people from hotspots in NSW, Victoria and the ACT for two weeks amid a surge in arrivals, which has pushed the system past capacity.
Queensland and the federal government have been working on plans for an 800-bed quarantine facility at Pinkenba in Brisbane, but the state has long pushed for a second 1000-bed facility at Wellcamp near Toowoomba.
The latter was deemed "unsuitable" by Health Minister Greg Hunt in June.
But Ms Palaszczuk is moving ahead with Wellcamp, being built by the Wagner Group, without federal support.
Construction is already underway with 500 beds to be operating by the end of the year with another 500 to come online by the first quarter of 2022.
"This is going to be a great boost for our defence against the Delta virus in this country and, in fact, I believe we need regional facilities right across the country," Ms Palaszczuk told reporters.
"We are going to be dealing with Delta for some time and if we want to open Australia, we want to open our states up, regional quarantine facilities are the second part of the answer - the first part of the answer is vaccines."
The facility will have single, double and family rooms in cabin-style accommodation without any adjoining hallways.
The state will lease it from the Wagners for one year, initially, with guests to be bussed there from Brisbane and the Gold Coast.
The Hotel Grand Chancellor in Brisbane was the site of a COVID-19 outbreak, prompting a snap three-day lockdown in January 2021. Source: AAP
Deputy Premier Steven Miles said health and policing staff arrangements are still being worked out.
Any virus patients will be treated at the state's five existing COVID-19 hospitals.
Mr Miles said the facility is the first step towards replacing hotel quarantine, which is inadequate against Delta.
"We can ensure that it replaces current hotel quarantine usage," Mr Miles said.
Prime Minister Scott Morrison, and Toowoomba Mayor Paul Antonio, did not know about the premier's announcement beforehand.
"Well I think he does now," Ms Palaszczuk said.
Mr Morrison said the federal government wouldn't support the state's project, but it would not stand it the way either.
"To have people quarantine there rather than in hotels, that is entirely a matter for the Queensland government," he told reporters.
"And they have made that decision, and they could have done that months ago, if that's what they wished to do."
Ms Palaszczuk on Wednesday said there were more than 5114 people in hotel quarantine, including 3257 domestic arrivals, which was putting too much strain on the system's 22 hotels.
Hotel quarantine has been paused for NSW, Victorian and ACT travellers for two weeks until new system, which will allocate specific rooms for travellers, is set up.
Queensland police said people can still apply for an exemption to enter the state if they have a compelling reason, over the next fortnight.
Elsewhere, about 120 Australian Defence Force troops are backing up police at NSW border checkpoints.
At present, only certain essential workers who have had at least one vaccine dose are allowed to drive into Queensland.
The state recorded no new local cases of COVID-19 and two cases in hotel quarantine on Thursday.
