Djokovic's vaccination status is unclear, and he has so far refused to confirm whether he has been jabbed, which has led to doubts over whether he will be in Melbourne.
Victoria Premier Daniel Andrews has made it clear that tennis stars arriving for the tournament must be prepared to show proof of having protection against the virus.
For Djokovic, who is competing this week at the ATP Finals in Turin, it remains to be seen whether he is willing to go through that process.
Tiley told Channel 9: "It's been made very clear, when the Premier announced several weeks ago that in order to participate at the Australian Open, to come into Victoria, you'll need to be fully vaccinated.
"Immediately we communicated that to the playing group, it is the one direction that you take that is going to ensure everyone's safety. All the playing group understands it, our patrons will need to be vaccinated, all the staff working at the Australian Open will need to be vaccinated.
"But when we're in a state where there's more than 90 per cent of the population fully vaccinated, they've done a magnificent job with that, it's the right thing to do."
Tiley said organisers "would love to see Novak" make the trip to a tournament he has won a record nine times.
Djokovic sits on 20 grand slam titles, the same mark as Roger Federer and Rafael Nadal. He needs one more to set the outright men's record, having lost to Daniil Medvedev in the US Open final in September.
"We have been speaking to Novak Djokovic's team and Novak and the team understand clearly that in order to come and play the Australian Open they'll need to be fully vaccinated," Tiley said, according to the ABC.
"I know that he wants to play it, he's clearly indicated that and he knows the conditions that he'd have to undergo in order to be eligible to play."
The tournament is due to get under way on 17 January, with the player bubbles and quarantine measures that were in force at the 2021 edition no longer in place and Melbourne Park set to operate at full capacity.
Australian player Nick Kyrgios this week said he believes the vaccine mandate is "morally wrong".