Prime Minister Scott Morrison says the categories of people who can be tested has now been expanded beyond two core groups.
Previously, tests were limited to those who were showing flu-like symptoms; and who were also either recently returned from overseas, or who had come into contact with a confirmed case of COVID-19.
Other groups who are now eligible for testing, after showing fever or acute respiratory symptoms, include: health workers, aged care workers, identified hotspots; and high-risk settings such as detention centres where two cases have been reported.
Other high-risk settings identified include: rural and remote Aboriginal and Torres Strait Islander communities, correctional facilities, boarding schools and military bases (including Navy ships) that have live-in accommodation.
The decision was made after a meeting on Wednesday night of the national cabinet - consisting of state and territory leaders - which was formed to respond to COVID-19.
It is the cabinet's third meeting in four days.
Mr Morrison says getting on top of contract tracing was the key topic of discussion for national cabinet members.
"National Cabinet also agreed that testing will be expanded to include hospitalised patients with fever and acute respiratory symptoms of unknown cause, at the discretion of the treating clinician," he said in a statement.
States and territories are being given discretion to further expand the criteria.
The national cabinet next meets on Friday.
