Australian chef-de-mission Anna Meares said they would resume training when well enough. Their campaign is due to start on Saturday against China.
"It is confined to the water polo team. There have been five athletes in total who have tested positive," she said.
Australia has a 13-person team in Paris.
"They are following all the protocols that we have. I can confirm that all the water polo team has been tested as well," Meares added.
The protocols include wearing masks and isolating outside of training.
Paris is the first summer Olympics since the pandemic-delayed Tokyo Games in 2021, which was mostly held without spectators and with rigorous Covid testing procedures in place.
