Victorian premier Dan Andrews announced on Friday the state would go into stage-four restrictions from midnight Friday until 11.59pm Wednesday.
Tournament boss Craig Tiley said there was no prospect of cancelling the tournament and play would continue as scheduled.
The Open is close to the halfway point, with some players already through to the fourth round, and is due to conclude on Sunday, February 21 with the finals of the mixed doubles and men's singles.
"Play will continue and players will compete in a bubble form not dissimilar to what they've been doing right throughout the year," Tiley said.
"This was the first event they'd played with crowds.
"Those who will be allowed on site will be players and their direct support teams as well as those staff members who are unable to do their work from home."
He said the new arrangement had been well-received by players, who he had met with over zoom and in person.
"They understand; they have been through a rigorous process already ... they've all been very positive about it."
He said the prospect of playing without crowds and a player bubble was one of the contingency plans that they already had in place.
Tiley expected players to spend the bulk of their time on site, either playing or training, and they would otherwise remain under the same conditions as the general public.
Premier Andrews said tennis players were not considered "essential workers" but the nature of their profession meant they could not work from home.
"If you can work from home, you must," Andrews said.
"That's (not) their workplace.
"If it wasn't just for five days, things might have been different."
He said the current infection - of the highly contagious UK variant of the virus - was not linked to the tennis and there was no advice to cancel it.
"I don't have advice to cancel the event on the basis that it is unsafe, I just don't have that," he said.
"This case has got nothing to do with that event. This case is a different matter."
The event has already suffered a significant financial hit with crowds reduced to 50 per cent capacity and Tiley conceded it would do more damage to their bottom line.
Just 76,213 had attended in the first four days compared to a record 299,156 at the same point in 2020.
With a number of high-profile matches scheduled for Friday night, including Nick Kyrgios versus Dominic Thiem, Andrews urged people to "use good judgement" and not go out, even though the lockdown will not come into effect until midnight.
Tiley said he would leave it up to fans but they could get a refund if they chose not to attend, while tickets for the next five days would be refunded.
