ACT Health Minister Rachel Stephen-Smith said the double-dose vaccination rate for eligible residents aged 12 and over now stood at 68 per cent.
No additional cases were linked to the Canberra Hospital special care nursery cluster, which remains at five cases, including two babies.
Ms Stephen-Smith said five other babies had been identified as close contacts and were now in quarantine.
Of the 40 cases reported on Friday, 21 are linked to known cases or ongoing clusters with 19 under early investigation. Nine were in quarantine for the entirety of their infectious period while at least 10 were in the community while infectious.
Of those cases, 16 people were in hospital. Eleven are unvaccinated, three had received one dose and two were fully vaccinated. There are six people in intensive care, five of them are requiring ventilation.
The total number of cases for the ongoing outbreak now stands at 1147 with 711, or 62 per cent, having recovered.
Health authorities are managing 430 active cases.
Ms Stephen-Smith confirmed the two babies who tested positive while in the Centenary Hospital for Women and Children had now been moved to a paediatric COVID-19 ward.
Investigations into the source of infection are still under way.
A fully-vaccinated team member who tested positive has been confirmed as caring for the first baby, who tested positive on Wednesday.
Five other babies were now in quarantine and could be visited on Saturday if they returned a negative test.
"This is an incredibly challenging and stressful situation for their parents and carers will be able to visit these infants after they return a negative test on day five," she said.
Additional funding for ACT schools
ACT Education Minister Yvette Berry said an additional $5.7 million was being invested in Canberra schools as students neared a staggered return to classrooms.
The lion's share of the funding, $2.9 million, will be used for improvements to ventilation in classrooms and buildings with $1.5 million to relieve teaching hours to support public schools to implement these COVID-19 measures, including staff absences and enabling staggered breaks.
A further $688,000 will be spent on masks and hand sanitiser and early childhood education services, including out of schools hours care services.
Ms Berry said the most important aspect of the plan was to continue increasing vaccination rates.
"The chief health officer has told us that the best thing we can do to keep these children safe is to make sure that adults around them are getting vaccinated," she said.
"All of these measures are important to ensure that there is a safest possible return to onsite education."
Renewed push for Indigenous Canberrans to get the jab
While nearly 97 per cent of the ACT population had received their first jab, authorities expressed concern at the lag in Canberra's Indigenous community.
Ms Stephen-Smith said the 74.4 per cent of the community aged 12 and over had received their first dose while the fully vaccinated rate remained at 51.4 per cent .
Ninety of the outbreak's cases had been Aboriginal and Torres Strait Islander people, most of which had not been fully vaccinated, she said.
Work was being done with the Winnunga Nimmityjah Aboriginal Health centre to encourage more in the community to come forward for the jab.
"We're putting a lot of effort into really ramping up very specific cultural appropriate messages but also access to vaccination for that community," Ms Stephen-Smith said.
"There just comes a point where it is important to acknowledge publicly that there is anxiety in the community, and then also to acknowledge the work that is going on with community leaders to address the impacts of both the cases, the contacts but also the vaccination program [and] vaccination rate for Indigenous Canberrans."
MORE COVID-19 NEWS:
Victoria again broke its single highest daily case tally with Friday's figures reaching 1838 cases and five deaths.
The state has recorded 75 deaths in the current outbreak with active cases now pushing past more than 16,000.
NSW announced 646 new cases on Friday, with a further 11 deaths. Two were in their 50s, one in their 60s, four in their 70s, and four in their 80s.
In the Southern NSW Local Health District, 25 new cases were recorded and four are in hospital.
There were eight new cases in Queanbeyan-Palerang, six in Goulburn, nine in Snowy Monaro and two in Eurobodalla.
The total number of cases in the region now stands at 342 since June.
From Monday, indoor gatherings will be capped at 10 people, excluding children aged under 12. Limits on outdoor gatherings will now be lifted to 30 people.
For weddings and funerals, 100 people can attend.
More restrictions will be eased once the 80 per cent rate is reached, which is expected to be achieved before the end of October.
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