Roughly five million people in and around Australia's second-largest city have been under stay-at-home orders since last week after a surge in coronavirus infections.

In a crackdown on rule-breakers, police in Victoria state have handed out more than 500 fines in six days, totaling Aus$902,000 ($631,000).

Among them were two men caught playing Pokemon GO in their parked car, a group who claimed to be "charging their phones" at a friend's home, and a man who sat down with his meal at a KFC outlet and refused to leave.

That came just days after a group was fined Aus$26,000 when their house party was exposed by an unusually large order of KFC.

"A particular concern for us is the ongoing parties and gatherings," acting assistant police commissioner Rick Nugent said.

Melbourne residents are only allowed to leave their homes for work, study, medical care or exercise, or to buy essentials.

About 1,500 cases have been recorded since the lockdown began as the city experiences soaring community transmission, with clusters emerging in public housing estates, nursing homes and a school.

Despite the rest of Australia sealing off borders with Victoria, a cluster of 34 cases has broken out in Sydney, in neighboring New South Wales state, linked to a popular pub.

NSW health officials on Wednesday said the most likely source of that growing outbreak was a man visiting from Melbourne.

"We've made these links with extensive interviews over multiple public health units," emergency health manager Jennie Musto told reporters.

Police were called in to enforce social distancing Monday after popular US snack chain Krispy Kreme offered free doughnuts to people who had birthdays during isolation, attracting large crowds to its stores across Sydney.

Acting NSW assistant police commissioner Tony Cooke slammed the promotion as "nonsensical".

Australia has recorded just over 10,000 coronavirus cases and 111 fatalities. Most states and regions have returned to normal in recent weeks, having reported few or no new daily infections.