Greater Sydney, the Blue Mountains, the Central Coast and Wollongong will go into a 14-day lockdown as health authorities try to regain control of a coronavirus outbreak that has ballooned to 80 cases.
From 6pm on Saturday, residents in the affected areas will only be able to leave home for essential reasons.
People may only leave their homes for work, to shop for essential items, to seek medical care, or for care-giving or compassionate reasons.
"The NSW government has always prided itself on taking the expert health advice," Premier Gladys Berejiklian said after a crisis cabinet meeting where the decision was made.
"Even though we don't want to impose burdens unless we absolutely have to, unfortunately, this is a situation where we have to."
It comes after another 12 new cases were recorded in NSW and exposure venues spread beyond the designated hotspot areas to communities including the northern beaches and western Sydney, where people have potentially been infectious for days.
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Weddings are allowed to go ahead on Saturday and Sunday with restrictions in place, but must be cancelled from Monday onwards.
Ms Berejiklian urged people not to panic buy, or stress about their finances.
Shops will remain open and financial assistance will be available.
"It's never easy when all of us have to face these circumstances, but we're all in the same situation," she said.
"We've had to do this before. We know the drill."
While authorities will reassess the need for the lockdown in a week, Ms Berejiklian said, it is unlikely to be shortened.
"There's no point doing a three-day and then having the virus continue to bubble away in the community," the premier said.
"If after seven days there's a dramatic change in the trend, we'll obviously evaluate the situation.
Restrictions have also been introduced for regional NSW.
No more than five visitors are allowed for a household each day, masks are required indoors and restrictions apply to weddings and funerals.
All hospitality has to be seated and the one person per four square metre rule has been revived, while outdoor events are allowed to operate at 50 per cent capacity.
The restrictions are required to ensure the virus doesn't take hold in the regions if Sydney travellers unknowingly spread it there, the premier said.
Some 29 cases were recorded in the 24 hours to 8pm on Friday, 17 of which had already been announced, taking the cluster to 80 cases.
More than half were not in isolation from the beginning of their infection period.
Health Minister Brad Hazzard said the level of concern from health authorities and government was "extraordinary".
"The Delta variant of this virus is certainly moving around our community far faster than anyone could have imagined," he said.
Chief health officer Kerry Chant said the virus was moving too fast for contact tracing to shut it down.
"Despite testing numbers being quite high and the contact tracers getting in contact with people rapidly, what we're seeing is by the time we've got there and uncovered the chains of transmission, we have a number of people infectious in the community," Dr Chant said.
More to come ...