The Manus Island detention centre is made up of internally-secured accommodation compounds, which for the past two weeks have been used to separate detainees based on whether their refugee claims had succeeded.
Detainees said there were celebrations after internal gates were opened about 11.30pm on Thursday night, allowing them to move about and see their friends.
The perimeter gates remain locked and detainees cannot leave the centre, but they also say security staff have told them they are now allowed to possess and use mobile phones, which were previously banned.
The Papua New Guinea Supreme Court ruled earlier this week that Australia's detention of asylum seekers on Manus Island was illegal, prompting Prime Minister Peter O'Neill to announce the centre's closure.
There is still no timeframe for the centre's closure, and PNG Immigration authorities said they were still seeking legal advice about how to proceed.
New Zealand offer still on the table
Prime Minister Malcolm Turnbull said his Government had been in discussions with New Zealand but stressed it was unlikely that the 850 detainees would be sent there.
Immigration Minister Peter Dutton has quashed the option of bringing the men to Australia, but a spokeswoman for his New Zealand counterpart Michael Woodhouse told local media his country's offer to take 150 refugees each year remained on the table.
New Zealand had offered to resettle 300 refugees as part of a two-year deal with Australia, signed in 2013 by former prime minister Julia Gillard.
At the time, Gillard said the deal could affect asylum seekers currently being held in processing centres on Manus Island and Nauru.
The plan had been proposed to begin in 2014 — with the annual resettlement of 150 refugees contributing to New Zealand's overall intake of 750 places each year — though the plan was quashed by former prime minister Tony Abbott.
Turnbull today confirmed discussions with New Zealand had been held, but did not expand on any potential agreements.
"We have to be very clear that settlement in a country like New Zealand would be used by the people smugglers as a marketing opportunity," he told Melbourne radio station 3AW.
Dutton further dampened speculation today, describing the deal made by the Gillard government as "a back door way to get into Australia".
"What Labor had proposed was to allow people to go to New Zealand, gain New Zealand citizenship and then, as a right under visa arrangements with New Zealand, settle in Australia," he said.
"It was going to do nothing other than encourage people smugglers to get back into business."
Australian officials going to PNG next week
Turnbull also repeated his strong stance against transferring the men to Australia, saying "we can't let the empathy we feel … cloud our judgement".
He spoke with his PNG counterpart last night and made it clear that the detainees would not be coming to Australia.
Australian officials will travel to PNG next week to try to resolve the issue.
Turnbull also spoke out against Opposition Leader Bill Shorten, saying that although he had committed to strong borders, Labor could not be trusted on the issue.
He referenced the multiple Labor politicians "breaking ranks" on policy, calling for the closure of offshore detention centres.
One such politician was Melissa Parke, a former United Nations lawyer who has argued that under international law Australia had always been responsible for the asylum seekers sent to Manus Island and Nauru.
The outgoing politician has called for resettlement in Australia or in countries where it could be guaranteed human rights would be respected.
Former speaker Anna Burke backed her comments this morning, saying she had been "calling for a long time to close down the centres".
(Asylum seekers at the Manus Regional Processing Centre. Picture: AAP)