SYDNEY—Australia plans to experiment with shorter isolation periods for vaccinated travelers and the gradual return of foreign students, Prime Minister Scott Morrison said in laying out a four-stage strategy to return life in the country to normal.

Still, some health experts worry that the government’s push to reopen is premature as Australia has fully vaccinated around 6% of its population and the Delta variant is spreading in ways that scientists don’t fully understand. Australia doesn’t have enough doses of the Pfizer Inc.-BioNTech SE vaccine to meet current demand, raising concerns that the government won’t be able to meet a target of inoculating every adult that wants to be vaccinated by the end of the year.

Mr. Morrison said Friday that increased risks from the Delta variant necessitated a 50% cut to the number of people allowed to arrive in Australia on commercial flights. Thousands of the country’s citizens remain stranded overseas.

Under the first phase of the plan, Mr. Morrison also said Friday, some fully vaccinated returning travelers would be allowed to isolate at home for seven days as part of a small-scale pilot, exempting them from requirements to spend 14 days in quarantine, usually in a hotel, at their own expense. A limited number of foreign students will be allowed to arrive in Australia for classes as part of another trial.

“There is clear medical evidence to suggest that vaccination means that shorter periods of quarantine are possible without any compromise of the health and safety standards that is currently delivered by a 14-day quarantine for unvaccinated persons,” Mr. Morrison said.

Chief Medical Officer Paul Kelly said the move could make the community safer, as people quarantining at home wouldn’t interact as much with others, such as hotel staff.

People lined up to get vaccinated against Covid-19 in Sydney on Thursday.

People lined up to get vaccinated against Covid-19 in Sydney on Thursday.

Photo: Jenny Evans/Getty Images

The moves illustrate a shift in thinking as Australia and other countries with few coronavirus cases plan for a future when Covid-19 becomes a less threatening disease, like the flu. Australia’s current strategy relies on tough border controls to restrict who can enter the country, and the use of aggressive contact tracing, mask mandates and social distancing when outbreaks occur.

Mr. Morrison said the government’s four-stage plan to reopen borders fully and lift most restrictions on residents can advance only if more people are vaccinated. The government intends to set vaccination thresholds to guide each stage, and authorities are assessing how the spread of the highly contagious Delta variant will affect the modeling that underpins the road map.

Some health experts worry that the government could be rushing into offering citizens a pathway out of the pandemic, given the behavior of new variants. “We have got to be really cautious because we really don’t know how this Delta variant is mutating,” said Dr. Jaya A.R. Dantas, a professor of international health at Curtin University in Perth.

Covid-19 strain known as Delta is in at least 60 countries including the U.S. and likely to spread world-wide, Covid-19 Genomics UK Chair Dr. Sharon Peacock told WSJ's Betsy McKay at the WSJ Tech Health event on June 9. The Wall Street Journal Interactive Edition

More than 220 people in New South Wales, a state of more than eight million people and where Sydney is located, have been infected since an outbreak of the Delta variant began there in mid-June. Authorities in Sydney say the current outbreak began when a limousine driver who transported international flight crew contracted the coronavirus.

Cities in other states and territories were locked down after a man infected with the virus worked at a gold mine owned by Newmont Corp. in the Tanami Desert in northern Australia. Authorities in the Northern Territory, which includes the Tanami Desert, say the man became infected during an overnight stay at a quarantine hotel in Brisbane, on the country’s east coast. More than 900 people left the mine for cities across Australia while the man was infectious.

“We still need to fix our quarantine system so that we don’t continue to see leaks and lockdowns while the majority of Australians remain unvaccinated,” said Australian Medical Association President Dr. Omar Khorshid.

The University of Sydney in March. Australian universities have cut more than 17,000 jobs since the pandemic began, according to Universities Australia.

The University of Sydney in March. Australian universities have cut more than 17,000 jobs since the pandemic began, according to Universities Australia.

Photo: Bai Xuefei/Zuma Press

The government hasn’t put specific dates on its road map. In the second phase, lockdowns would be used only in extreme circumstances, such as to prevent hospitals from being overwhelmed. Border controls would be relaxed for vaccinated residents.

A third phase would see caps abolished on returning travelers who have been vaccinated, and more travel bubbles with countries in the region, such as Singapore. Mr. Morrison said the final phase would involve authorities managing Covid-19 like any other infectious disease.

For Australia’s leaders, any move to roll back border restrictions is politically risky ahead of a federal election due within a year. Three in five Australians say borders should be closed at 25 active cases or fewer, according to a survey by JWS Research earlier this year.

However, border closures also act as a drag on Australia’s economic recovery and disproportionately hurt communities that rely on foreign visitors or students. Australian universities, for example, have cut more than 17,000 jobs since the pandemic began, according to industry group Universities Australia.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com