There is an unprecedented rise in the early detection and treatment of HIV cases in NSW, through new "rapid" tests that work in minutes and "pop-up" testing centres at events such as Mardi Gras.
Surveillance figures show the proportion of newly identified HIV cases where the disease is advanced has halved since last year, with the highest proportion of gay men in nearly 20 years now getting tested.
About 100 people were diagnosed in the first quarter of this year, up slightly on last year after a huge rise in testing.
NSW Health Minister Jillian Skinner said the plan was to virtually eliminate the spread of HIV in NSW by 2020.
"As we make testing more accessible and continue to target at-risk groups, we would expect new diagnoses to rise - as they have done - before they start to fall again," she said.
Andrew Grulich, a professor at the Kirby Institute for infection and immunity in society at the University of NSW, said the testing increase was "striking", with some clinics doubling their workload.
"We need early diagnosis and more treatment to reduce transmission," he said. The figures show the proportion of people diagnosed with low CD4 cell counts is decreasing, meaning fewer people have the virus for long periods of time before it is detected.
"That means there is less of a period when people don't know they are HIV positive, and are more likely to be transmitting it," he said.
"The median CD4 counts we are finding are over 500, which is something we have never seen before".
John de Wit, the director of the Centre for Social Research in Health at the University of NSW, said about 76 per cent of gay men had been tested in the past year, the highest rate in nearly 20 years.
But he was concerned a gradual decline in condom use showed no sign of abating.
"If anything, it's going in the wrong direction," he said. "We are doing quite well, perhaps better in terms of undiagnosed infection, and getting people on treatment … but we have to do something about driving down unprotected sex."
The report says about 35 per cent of gay men do not always use condoms with casual sexual partners.
ACON chief executive Nicolas Parkhill said new tests that delivered results in 30 minutes and "pop-up" clinics "demonstrate that taking testing to the community, rather than relying on clinic models, is where we need to go".
But he said it was crucial that a new federal HIV strategy to be released in July allowed people access to medications through community pharmacies rather than hospitals as is now the case, and improved access to rapid testing.
The data shows a "pop-up" clinic at Mardi Gras this year tested a higher proportion of men with high-risk sexual behaviours and found HIV in 2 per cent, double the average rate.
NSW chief medical officer Dr Kerry Chant said she was confident the 2020 target would be met, but more needed to be done.