Football Australia have fined coach Graham Arnold over €16,500 for breaking self-isolation rules after testing positive for Covid-19.

But the head coach can still join the Socceroos when they play Japan on Thursday if he provides a negative PCR test before the game, the governing body said.

Sydney radio station 2GB reported that Arnold had been seen walking his dog at the ocean swimming pool in the Sydney suburb of North Narrabeen without a mask on Sunday, three days after testing positive for the virus.

Covid regulations in the eastern state New South Wales require that people who test positive for Covid-19 self isolate for seven days, only leaving isolation to get medicine or in case of emergency.

Arnold conceded that he had gone out with his dog to Narrabeen Beach, Football Australia said in a statement.

"I sincerely apologise for my error of judgement on Sunday," Arnold was quoted as saying.

"I accept that I should not have left my home as per the New South Wales self-isolation protocols and will remain at my property until my self-isolation window concludes. I also accept the sanctions that come because of this error."

Football Australia chief executive James Johnson said the body was "disappointed" to learn of the 58-year-old's breach of isolation and would fine him, which would be donated to the Red Cross Flood Relief Fund following recent floods that engulfed towns across Australia's east coast.

"Graham has been diligent throughout Covid, however on this occasion he has made an error of judgement, which is clearly disappointing," Johnson said.

"We have sought to act as swiftly as possible on this matter today and have imposed a significant fine, which underscores how importantly we value our representatives abiding by government protocols."

Football Australia said Arnold had tested negative in his latest PCR tests and would need to test negative again after his self-isolation period to be able to rejoin the Socceroos camp for Thursday's game against four-time Asian champions Japan, ahead of a showdown with Saudi Arabia in Jeddah five days later.

Australia need to win both matches to ensure automatic qualification for the World Cup in Qatar later this year. Japan will book their spot if they beat the Socceroos.

Australia are three points adrift of Japan, with first-placed Saudi Arabia a further point ahead in Asian Group B.

Regardless of the results, Australia are guaranteed to finish at least third and move to a playoff against the third-placed team in Asian Group A.

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