Australians travelling to the northern Iraq city of Mosul without a legitimate reason face jail.
Foreign Minister Julie Bishop declared the Mosul district in Iraq's Ninewa province a "designated area" on Monday.
The city is the largest controlled by the Islamic State extremist group.
Read more: Life under Isis rule in Mosul
The organisation had carried out public beheadings, killing and executions and destroyed historic and religious sites in the area, Ms Bishop said.