The far-right commentator, who is known for her controversial views, was brought into the country ahead of filming for Channel Seven's Celebrity Big Brother alongside Caitlyn Jenner, who also arrived last week.
Katie was pictured at Sydney airport, where she was seen wearing a face mask, as is required in airports and across NSW at the moment, and was accompanied by Australian police officers.
In an Instagram video, Katie called Covid lockdowns the "greatest hoax in human history" and said she was planning on breaching the quarantine rules, by opening the door to security guards without a mask and nude.
"I’ve been told when they bring three meals a day to the door … I have to wait 30 seconds before opening the door," she said. "And then I can open the door but only with a face mask."
She claimed that she was "lying in wait" in the bathroom until the knock came so she could "frighten the s**t out of them [the workers] and do it naked with no face mask".
Channel Seven released a statement saying Katie had been dumped from the show.
"Seven and Endemol Shine strongly condemn her irresponsible and reckless comments in hotel quarantine," the statement read.
Home Affairs Minister Karen Andrews told ABC News Breakfast that Katie's visa had been cancelled.
"The fact that she was out there boasting about breaching quarantine was appalling," Ms Andrews said.
"It was a slap in the face for all those Australians who are currently in lockdown, and it’s just unacceptable behaviour. So, personally, I’m very pleased she’ll be leaving.
"We will be getting her out of the country as soon as we can possibly arrange that. So I’m hopeful that it will happen imminently."
According to the ABC, NSW Health Minister Brad Hazzard said he was shocked by Katie's behaviour and hoped she was "on the first plane back".
"To think that she could actually think that the measures that we are taking to keep our community safe can be treated with such juvenile, imbecilic behaviour is just mind-boggling."
Many Australians have taken to social media to share their anger that Katie was allowed into the country in the first place, despite many stranded Aussies unable to enter the country.
Last year, Katie was permanently banned from Twitter for breaching the "hateful conduct" policy.
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