It is understood the Aquarius Backpackers is the venue at the centre of the feared outbreak.
Police are currently manning the entrance to the hostel.
The affected tenants will now spend the next seven days in lockdown.
It comes with Schoolies celebrations set to begin this weekend, as thousands of school leavers prepare to travel to Byron Bay.
NSW Greens MP Tamara Smith, who represents Ballina, said on Facebook overnight that she was closely monitoring the situation. The post appears to have since been deleted.
“NSW Health have locked down the venue and all 84 people are in a seven-day lockdown in the premises and I’m told being supported with food, health and support,” Ms Smith said in the post.
“Police are monitoring compliance 24/7 over the next seven days.
“My thoughts are with everyone in that situation as it will be a tough time, and I will keep checking in to make sure that people are getting the support they need.”
NSW Health is yet to comment.