A total of 1262 cases of COVID-19 were recorded in NSW, health officials said on Sunday.
The new cases cover the 24 hours to 8pm on Saturday, with seven people dying from the virus in this time.
This included a man in his 20s from western Sydney, a woman in her 40s and a woman in her 50s from south-western Sydney and a man in his 50s from western Sydney.
Across NSW, 78.1 per cent of the over-16 population has received one COVID-19 vaccine, with 45.6 per cent now fully vaccinated.
From Monday, people across NSW who have received both doses of a COVID-19 vaccine will be allowed more freedoms.
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"For those who live outside the LGAs of concern, up to five fully vaccinated adults can engage in outdoor recreation in a person's LGA or within 5km of home. Children under 12 will not be counted in this total," NSW Health said.
NSW Health's ongoing sewage surveillance program has detected fragments of the virus that causes COVID-19 at Karuah and Dungog treatment plants.
NSW Premier Gladys Berejiklian said people could look forward to freedoms at the 70 per cent double-dose vaccination rate, but "we can't afford to let our guard down".
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"There has been some stablisation in local government areas of concern," Ms Berejiklian said.
"However, the most concerning areas where the virus is picking up pace at the moment are in a couple of suburbs in south-western Sydney, as well as some suburbs in the inner Sydney and inner western areas."