The lifting of restrictions around passenger numbers on public transport will see capacity on trains almost double from July 1.
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From next month, 68 people will be allowed in a train carriage - up from the previous maximum of 36.
The limit for buses has also been eased up from 16 to 23 passengers.
The system of green dots will remain in place, with extra dots to be rolled out ahead of July 1.
"This is about following the green dots," Transport Minister Andrew Constance said, "and people have done that so successfully over the last month."
Premier Gladys Berejiklian said a "new configuration" for train seating was the reason for the 88 per cent increase in the number of passengers, but there was more detail available about that configuration.
It is understood the same social distancing measures will still apply, and Ms Berejiklian said people were still being encouraged to travel outside peak periods.
"Passengers still need to leave a space or an empty seat between themselves and other customers and continue to find green dots for the safest places to sit and stand. No green dot, no spot," Ms Berejiklian said.
Mr Constance said new configurations would increase the public transport network's capacity to 1.3 million passengers a day.
Chief Health Officer Dr Kerry Chant said there had been three new cases of COVID-19 overnight, all from overseas travellers quarantined in Sydney hotels.
No new cases of community transmission had occurred, and the Illawarra case identified on Monday had not had any cases linked to him.
Dr Chant said the total number of confirmed cases in NSW was 3134 and 7895 tests had been carried out since 8am on Monday.
Overall more than 650,000 tests had been carried out in NSW.
There were 46 people being treated for COVID-19 and none of them were in intensive care units.
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