But there are doubts about how much businesses can recover.

From 6pm, 16 local government areas along the border will be the only parts of NSW where those seeking entry to Victoria can come from without having to get tested for COVID-19.

Visitors will join Border residents in being able to cross freely, but will need a permit.

Albury MP Justin Clancy hoped there could be a permit reflecting the nature of tourists' travel, so they wouldn't have to apply for a new permit every time they crossed.

"I would be hopeful we can have a situation where they can travel over a period of time," he said.

"It is mixed [reactions].

"We can't take back what's happened over the last few weeks in terms of the impact, and hope now with Australia Day approaching, there's an opportunity for a level of business being restored."

The extent of the impact will be laid out to Federation councillors, who will consider writing to National Cabinet requesting "all states agree to a co-ordinated national response" in their council meeting on Tuesday.

"The snap decision by the Victorian government to close the border to NSW residents ... has caused devastating economic impacts," mayor Pat Bourke wrote.

"The economic losses included council's own Ball Park Caravan Park in Corowa, which went from 75 per cent occupancy to almost zero in the space of one day.

"It also is causing extensive social/mental health impacts."

Chief Health Officer Brett Sutton said "clearly it's a good epidemiological situation" in NSW border towns, allowing the downgrading of their virus risk by his government.

"I hope the green zone designation means people can feel confident to go to those areas for tourist purposes, and it's a bit easier on those residents," he said.

Premier Daniel Andrews also changed the status of all but 10 areas of Sydney from red to orange and said "hopefully we can have a situation where Sydney can be in fact green".

It is unclear whether all of NSW turning "green" would be the trigger for border checkpoints being removed.

Mr Clancy said the border closure "continues to be a burden".

"Obviously it rests with the Victorian government ... I would be urging its lifting," he said.

"Realistically, perhaps towards to end of this month it would be removed.

"Moving forward, the states need to be working together."

Mr Andrews said he indicated to NSW Premier Gladys Berejiklian of the zone changes via text message after she was unable to take his call.

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"I did indicate in my earlier texts that we will [speak] if there's a need to," he said.

"I will just point out though, in case there was any further interest in this, that the Chief Health Officer speaks with his counterpart very frequently.

"And I don't need to speak to any Premier of any other state to determine what our Chief Health Officer says is the safe and right thing to do.

"We express our absolute regret, that that this virus ... has disrupted the the Summer of many, many Victorians."