A woman in her 70s who was a passenger on the Ruby Princess cruise ship which docked in Sydney has become the seventh person to die from COVID-19 in NSW.
The woman died in hospital on Tuesday morning taking the national toll to eight, NSW Health said in a statement.
"There have been 107 cases diagnosed in NSW from the Ruby Princess and 26 cases interstate," the health department spokesperson said.
NSW is at a "critical" stage as the number of COVID-19 cases soars past 800, with the premier warning people who ignore social distancing rules they will be slapped with harsh penalties.
Gladys Berejiklian on Tuesday morning said the state was sitting on the precipice of a more serious outbreak and had to avoid the mistakes of other countries.
"We don't want to go down the path that other nations have gone down," she told reporters in Sydney.
It comes as the number of COVID-19 cases on Tuesday morning reached 818 - an increase of 149 overnight.
The premier implored people to follow social distancing rules and warned authorities are "ramping up" compliance.
"If they're supposed to be in self-isolation and they're not, there are harsh penalties and we'll enforce that. We have to take this seriously," she said.
Ms Berejiklian hit back at critics who say she confused people with her decision to keep schools open while also encouraging parents to keep children at home if possible.
Her position appears at odds with the prime minister who insists there is no reason for children not to go to school.
Ms Berejiklian insists schools are a safe place but that NSW is "very different" to other states.
"I don't want to be another example of a jurisdiction that didn't do what it needed to do at the right time," she said.
"I don't care what criticism I get, throw it at me."
The premier added that she hopes by the end of the school holidays the situation goes back to normal but the measures in place will make sure NSW is ready if that's not the case.
NSW Education Minister Sarah Mitchell said the message around schools was clear.
"School is open for those who need to attend," she said alongside the premier.
Ms Mitchell said the absentee rate across public schools was 41 per cent on Monday which she expected to increase significantly on Tuesday.
NSW chief health officer Dr Kerry Chant said there was no level of immunity to COVID-19 for anyone in the community and urged young people in particular to not congregate in large groups.
"All of this is a numbers game," she told reporters on Tuesday.
"Help us at this critical point to flatten the curve."
Meanwhile, Sydney's Taronga Zoo and Dubbo's Taronga Western Plains Zoo became the latest venues on Tuesday to announce they would temporarily close from Wednesday afternoon to combat the spread of the virus.
While the zoos will be closed to the public, staff will continue to look after the welfare and safety of the animals, a zoo spokeswoman said in a statement.
Pubs, cinemas, gyms and churches are now closed across the nation in a bid to slow the spread of coronavirus while public transport in NSW will continue operating despite a steep decline in passengers.
Transport NSW secretary Rodd Staples said there had been a 40-to-45 per cent decline in public transport travel across the state in the past fortnight.