Multiple buildings have been destroyed as the Currowan bushfire rages out of control towards homes on the South Coast.
The fire was downgraded overnight from an emergency warning level to "watch and act".
The bushfire had been at an emergency level for most of Thursday and was threatening dozens of properties.
On Friday morning, the fire has forced the closure of parts of the Kings Highway in both directions near Western Distributor Road to allow for backburning efforts as the fire shifts.
The closure is in place from River Forest Road at Monga to Nelligen.
Araluen Road has been closed to drivers between Braidwood and Moruya.
Traffic authorities say residents may be allowed access at the discretion of emergency services.
Fire crews say the highway may be open periodically, but would be closed for an "undisclosed period of time" due to the fire being dynamic.
The fire has burnt more than 73,000 hectares and is moving towards areas in Bawley Point and Lake Tabourie. It is still active in areas near Kioloa, Pretty Beach, Pebbly Beach, Depot Beach and Durras North.
One resident has been taken to hospital in Sydney after suffering burns to their arms.
Strong westerly winds had exacerbated conditions on Thursday, moving the fire towards homes in Bawley Point.
A southerly change sent the fire towards homes in Lake Tabourie.
While the threat eased overnight after a horror Thursday for firefighters, conditions are set to worsen later in the day on Friday.
The NSW Rural Fire Service said a number of buildings have been destroyed in the fire.
However, it is not known how many have been destroyed, due to the severe conditions.
It's also not known if all the buildings destroyed were homes.
Teams to assess the numbers of homes lost in the fire will move into affected areas when it is safe to do so.
One firefighter was taken to Milton Hospital overnight with minor smoke inhalation but was released a short time later.
Speaking to the media on Friday morning, NSW Rural Fire Service commissioner Shane Fitzsimmons said the Currowan fire conditions were concerning.
"The fire continues to be very problematic and is influencing and spreading in a northerly direction and hitting coastal areas in a number of areas," he said.
"On Thursday we saw places like Bawley Point impacted and there's some early indication of the potential for buildings and homes being damaged and destroyed."
More than 90 bushfires are burning across NSW, more than half of them not contained.
Shoalhaven Rural Fire Service incident controller Mark Williams said no homes had been lost in Lake Tabourie as the fire moved north overnight.
"Thursday evening saw a southerly change come through and pushed the fire to the north in and around Lake Tabourie," he said.
"Some extraordinary work by firefighters have kept any damage in that location to a minimum, but there's been no reports of of homes lost in Lake Tabourie at this point in time."
Mr Williams said a significant amount of work was ahead for crews in the area as the fire continues to move north.
"It's progressing in a northerly direction in a line east to west from Lake Tabourie," he said.
The fire has also moved into the Budawang National Park and is also visible from areas as far away as Braidwood.
Containment lines are being set up along the western side of the fire near Budawang and Mongarlowe areas in an effort to prevent the fire merging with the nearby North Black Range fire burning near Braidwood.
The Princes Highway remains closed in both directions between the Kings Highway turn off and Burrill Lake.
Mr Williams said crews were working to prevent the fire spreading south towards the Kings Highway, which was being used as a control line for the fire.
"The fire is about 1.5 to two kilometres away from the Kings Highway around the Western Distributor Road intersection and that could be the area fire crews may need to use at some stage over the next few days," he said.
There are also fears the fire could progress further north into the Morton National Park.
"If it does, that would cause us huge grief as there are huge tracts of land there."
While conditions are set to be better than those seen on Thursday, high temperatures will be seen throughout Friday.
"There's going to be an easterly influence over the next few days and we'll try to hold the fire progression to the north," Mr Williams said.
"It also brings into play the southern containment area and we'll try and keep the fire north of the Kings Highway."
Temperatures are expected to reach into the mid 20s to low 30s on Friday with easterly winds forecast.
Community meetings were held for those affected by the fires on the South Coast on Friday.