The restrictions on foreign nationals travelling from China were introduced in early February and extended for another week on Thursday.
The extension effectively rules out China's participation at the Feb. 20-23 World Cup, which offers qualifying points for this year's Tokyo Olympics.
"It has been a very challenging few weeks for us all, but none more so than for the Chinese gymnasts and officials who have been training and preparing to come to Melbourne," Gymnastics Australia chief executive Kitty Chiller said in a statement.
"I have been in regular contact with the Chinese Gymnastics Association and its president, who informs me all of their delegation are well and have shown no sign of infection. Despite this, we all have to respect the Australian government's travel restrictions."
Among the 12 Chinese entries listed on the World Cup's website are four-time world champion Zhang Chenglong, who claimed the men's team gold at the 2012 London Olympics and bronze at the Rio Games.
Zhang's Rio teammates You Hao and Yang Liu will also miss out, along with Xiao Ruoteng, a former men's all-around world champion.
A viral outbreak that began in China that has infected more than 67,000 people globally. The World Health Organization has named the illness COVID-19, referring to its origin late last year and the coronavirus that causes it.
Chinese athletes in other sports have also had disruptions to Olympic preparations.
The entire Chinese women's soccer team and staff were confined to a Brisbane hotel for nearly two weeks due to quarantine restrictions after arriving in Australia in late-January for an Olympic qualifying tournament.