Neighbours took photos of dozens of people lining up close together outside the licenced venue.

Wollongong Police District attended the Harp Hotel, on Corrimal Street to conduct safety inspections on Friday and Saturday night.

A NSW Police spokeswoman said, on arrival, licensing police found the venue was complying with their COVID-safety plan and were in the process of evicting a number of people who were not abiding by social distancing requirements.

Read more: NSW's new COVID-19 restrictions detailed as second outbreak grows daily

A neighbour of the hotel told the Mercury said he had seen "scores of people lining up on weekend nights" to enter the hotel over past few weeks and had seen patrons not social distancing.

Wollongong Police District Commander, Acting Superintendent Brad Ainsworth said police would continue to enforce ministerial directions throughout the Illawarra.

"All licensed venues, restaurants and cafes need to be abiding by the one per four square metre rule, and venues also need to ensure compliance with their individual COVID-safety plans," Acting Supt Ainsworth said.

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"Everything we do as police is in the best interests of the community. We will come down hard on those who refuse to follow the rules, and there will be significant fines and legal action for those who choose to do the wrong thing."

On Tuesday, Premier Gladys Berejiklian announcement new rules would be introduced from Friday to pubs across NSW that would limit group bookings to a maximum of 10 people and cap the number of customers inside a venue to 300 people following a concerning rise in COVID-19 cases.

Hygiene marshalls will patrol venues to oversee social distancing, cleaning and hygiene, and ensure the mandatory implementation of a COVID-Safe plan.

Any business found in breach of the public health orders will be held to account and could face a penalty of up to $55,000 and a further $27,500 penalty may apply for each day an offence continues.

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On-the-spot fines of $1000 for individuals and $5000 for businesses can also be issued.

Liquor and Gaming NSW also have the power to enforce, for the first offence, a $5,500 fine or relevant penalty for breach of the Public Health Order; a second breach will see the business' closure for one week; and the third offence of repeated and willful non-compliance will see the business shutdown for up to one month.

The Harp Hotel was contacted for comment but did not respond by deadline.

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