From 11.59pm Tuesday, residents within the designated bubble zone will only be able to enter Victoria without a permit if they are travelling for six essential reasons including including medical care, compassionate reasons, work, education, playing sport or getting a COVID-19 vaccine.
Travel for sport and exercise will be limited to the minimum number of participants needed to play and spectators, excluding parents, will be off limits.
"The Delta variant has changed the rules and we want to make sure the border bubble continues to operate but for essential reasons," Victorian Health Minister Martin Foley said.
Victorian bubble residents who plan to enter NSW will be subject to the same restrictions.
"With the outbreak in NSW still growing, the public health advice is clear: we need to limit unessential movement across the border into Victoria where it is practical and possible," Mr Foley said.
"We know this will affect many border residents, but so will another outbreak of the Delta variant on our doorstep. We need to keep our border residents and all Victorians safe.
"We are updating the settings based upon that balance and the best advice."
People crossing into Victoria for one of the listed essential reasons will be unable to travel "further than reasonably necessary" for their activity, with fines of up to $5452 for non-essential travel.
"If you're from Albury, please don't shop in Wangaratta, Werribee or Warrnambool, if the essential reason for your travel can be attended to in Wodonga," Mr Foley said.
"You're not allowed to cross the border to visit a friend, go for a meal or go on a holiday."
Existing exceptions to getting a permit for travel will continue to apply, including emergencies or escaping family violence.
Mr Foley said the Victorian Government would continue to "work closely" with local governments, communities and industries to make sure the changes would be implemented "as smoothly as possible".
But border bubble mayors have lashed out at the decision, arguing the changes were made without enough prior consultation or clarity.
Murray River Council mayor Chris Bilkey said it was a “further kick in the guts” for the NSW side of the border.
“I think it’s an overresponse for dealing with an issue that’s a long way from here,” he said.
“We remain COVID free for a significant distance from our border, so I’d be happier if they defined the border bubble more narrowly and left the access between [the states] reasonably open.”
Albury City Council mayor Kevin Mack said border communities were deserving of financial support for the continued disruptions on movement.
"It's staggering to believe they continue to do this to us," he said.
Wodonga City Council mayor Kevin Poulton said border towns had been "forgotten once again".
Last month, the Victorian Government shrunk the border bubble and moved Murrumbidgee, Wagga Wagga, Hay and Lockhart into the "extreme risk zone" alongside the easing of COVID-19 restrictions in Victoria.
Committee for Echuca Moama chief executive Deanne Armstrong said the situation was “getting to crisis point” for businesses.
“It’s going to be a huge struggle to keep moving forward in these restrictions and we need something to change for our border communities,” she said.
“They’re receiving government support from NSW but it’s still not enough to keep the businesses going.
“You can’t see how some businesses will survive this...we need to come up with options other than closing down borders and businesses, otherwise we’re not going to have businesses here."
The border bubble currently in place with South Australia continues as normal.