Illawarra music powerhouse Yours and Owls received consent from the Wollongong Local Planning Panel (WLPP) last week to run the event, scheduled for Friday and Saturday night at Bulli Showgrounds.

But the last minute sign-off came with a condition which said they must obtain approval for the event from the Department of Health by July 29 and have a COVID-19 Safety Plan approved.

However, a spokeswoman for the NSW Department of Health told the Mercury they do "not have the authority to provide approval for events and acts in an advisory capacity only".

On Tuesday, the state's chief health officer urged NSW residents to avoid gatherings of 10 or more people.

Yours and Owls spokesman Balunn Jones spoke to the planning panel when it met to consider the approval last week and said he was confident each event would be COVID safe, with various measures in place to ensure the safety of patrons and discourage them from leaving their cars and mingling.

Each event will host up to 400 cars - with up to five people in each car - with the live feed of the concert transmitted through their car radios.

Mr Jones said the company was able to abide by the current COVID-19 restrictions which are in place under guidelines for major events.

"At this point in time, the event is legal under the public health order for us to conduct the event," he told the panel.

"The issue we are facing is that that could change at any moment. If there is an outbreak tomorrow or across the weekend, the NSW Government could change that... and then we would have to postpone the event."

On Tuesday afternoon, a Yours and Owls spokeswoman told the Mercury the concerts would be going ahead.

Last week, Wollongong City Council cancelled their own drive-in concert at the same venue, which was to be held on Sunday, due to safety concerns.

A spokesperson said updated information provided to council advising the Music at the Drive-in: Sons of the East show was not supported.

"Council, as well as our key advisory agencies ... had a number of concerns about the event which together led to its cancellation," the council spokesperson said.

"These concerns were the challenge of contract tracing up to 2000 people attending the event, the concert drawing people from outside the area and encouraging non-essential travel, and vehicles containing people from more than one household."

When speaking with the planning panel, Mr Jones admitted the Yours and Owls group were in a "compromising position" due to the uncertainty caused by the pandemic, and stood to lose $100,000 if the event was cancelled on Thursday or Friday due to changing health advice.

He said he would not choose to run an event in this way, but that the company had no other choice if it wanted to be able to work during the pandemic.

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