Chief Minister Michael Gunner announced that Katherine would transition from a lockdown into a lockout at midday on Saturday.
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The nearby community of Rockhole will also transition into a lockout, according to Mr Gunner.
The NT recorded two new positive COVID-19 cases overnight; one an international repatriation passenger from South Africa and one a close contact from Katherine who was already in Howard Springs.
"For the rest of Greater Katherine [apart from Binjari], you are now free to go about your lives without restrictions if you are fully vaccinated. The mask mandate for you will still stay in place," Mr Gunner said in a Facebook post.
"If you are not fully vaccinated, lockdown rules remain in place for you. You are only permitted to leave your homes for the five reasons. If you want to enjoy the freedoms most of the Katherine community can now enjoy, get vaccinated.
"The Katherine and Rockhole lockout will run for 14 days from when the last known case was infectious in the community, until Midday, 7 December.
"So - it's all good news in Katherine and across the Territory today. We're probably in the best place we've been in for some time now. But we clearly can't be complacent and there is still work happening to try to fully extinguish this cluster."
Mr Gunner said a third round of testing would be done in Binjari on Sunday, with the results expected back on Monday.
"If we can get negative results back for all of those tests we will be able to relax the hard lockdown in Binjari."
Meanwhile, a man has been caught at a bar in Darwin after breaking out of quarantine at Howard Springs.
NT police say the 27-year-old was seen scaling the fence of the quarantine camp, south of Darwin, before he was picked up by a white ute on Friday night.
He was later caught at a licensed venue on Mitchell St, Darwin, about midnight.
Police took the man back to Howard Springs, where he was tested for COVID-19 and returned a negative result.
Officers are now probing the incident, including tracking down the people who were involving in picking the man up outside the camp.
Australian Associated Press
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