New Zealand is to create a travel bubble with Australia allowing quarantine-free visits from 19 April.

Both countries have effectively eradicated COVID-19 after closing their borders to the rest of the world.

The move will come comes as a relief to families who have been separated by the coronavirus pandemic as well as to hard-hit tourist companies.

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While most Australian states had allowed quarantine-free visits from New Zealanders for months, the Wellington government had continued to enforce an isolation restriction for its neighbour, due to concerns about small COVID-19 outbreaks there.

However, New Zealand Prime Minister Jacinda Ardern said health officials now believed the risk of the virus being transmitted from Australia was low and that travel was safe, without the need for quarantine or mandatory testing.

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She said: “The bubble will give our economic recovery a boost and represents a world-leading arrangement of safely opening up international travel while continuing to pursue a strategy of elimination and keeping the virus out.”

But she warned the system carried a “flyer beware” warning, with the risk of travel being disrupted or quarantine imposed in the event of local outbreaks.

It would operate state-by-state and follow a risk-based traffic light system, with travel as normal in green light zones, suspended for 72 hours in orange zones and halting for an extended period in red zones.

Responding to the announcement, Chris Roberts, head of the New Zealand travel body Tourism Industry Aotearoa said: “Tourism operators can now take bookings with confidence and scale up their staffing.”

Mal Price, a restauranteur in the New Zealand ski resort of Queenstown, said the number of customers was down by about 80% this year.

He said: “Hallelujah. Business will be back. Every business will have hope now that they can survive. It really has been dire.”

Air New Zealand and Qantas Airways both plan to ramp up flights between the two nations to more than 70% of pre-pandemic levels, helping reduce the airlines’ losses.

Air New Zealand chief executive Greg Foran said: “I’ll certainly be digging out my passport for the first time since I joined the airline to head across the ditch to see my family, and I’m especially looking forward to meeting some of my grandchildren for the first time.”

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Ms Ardern said New Zealand is not currently considering travel bubbles with any other countries, apart from the tiny Pacific nations of the Cook Islands and Niue, both of which have strong ties with the country.

Australia has recorded about 29,400 coronavirus cases and 909 deaths since the pandemic began, while New Zealand has had just over 2,100 confirmed cases and 26 deaths.