NSW Premier Gladys Berejiklian has announced her state would tighten the rules for returning travellers, as Victoria reported its worst daily figures - 725 new cases and 15 deaths - since the start of the pandemic.
Ms Berejiklian said Victorians or NSW residents returning home to her state would now be required to enter mandatory hotel quarantine for 14 days.
People who have been in Victoria will also only be allowed to travel into a border community or into Sydney Airport.
These travellers will be required to pay for their hotel quarantine, like international arrivals, and rules around border permits will also become more restricted.
She said the new rules, which will come into force on Friday, had been directly influenced by the "escalating situation in Victoria".
"There's no doubt that the escalating situation in Victoria is a concern to us," she said.
"We are reviewing and look to tightening some of those definitions to make sure only those with absolutely necessary requirements [can come to NSW].
She added that "the death of an immediate family member would be an example of a situation where we would allow obviously people to continue coming in to NSW", and said the 14 days mandatory quarantine may be relaxed for people who needed to attend a loved one's funeral.
Health minister Brad Hazzard said he had been hopeful that Victoria's situation would improve, but that today's record numbers had strongly influenced NSW's new health advice.
"The step we are taking are meant and designed to keeping NSW residents safe," he said.
"The results from Victoria have been extremely disturbing to me as Health Minister.
"We want the economy to continue to operate, we want people to feel safe. The message is to treat everybody as though they have COVID-19."
Earlier, NSW Health said case numbers in NSW had held steady for the fourth day this week, with another 12 people identified as having COVID-19 in the overnight numbers.
One of the new cases was locally acquired with no known source and one of the new cases is a returned traveller in hotel quarantine.
Ten cases are linked to existing clusters: two to Thai Rock at Wetherill Park, two to The Apollo restaurant at Potts Point, and six associated with the Bankstown funerals cluster.
One previously reported case has been excluded after further testing, bringing the total number of cases in NSW to 3,631.
The low daily numbers came amid high rates of testing, with 22,087 tests reported in the 24-hour reporting period.
NSW Health also advised a previously reported case attended Kids Learning Academy in Busby while infectious on July 29.
The case is a child of a previously reported case, linked with Mounties in Mount Pritchard and the centre is closed for deep cleaning while contact tracing is underway.
Also as advised yesterday, two cases reported in today's numbers attended Greenway Park Public School and a previously reported case attended Bonnyrigg High School.
Both schools reopened for on-site learning today, while contact tracing continues and all close contacts are in self-isolation.
NSW Chief Health Officer Kerry Chant said people should be considering making small changes to their social lives in the coming week, and consider not attending social gatherings, or limiting the number of venues they visited.
She also reiterated that masks should be worn in any circumstances where physical distance could not be maintained, and said residents of the Cumberland, Parramatta, Bankstown, Liverpool and Campbelltown are were asked to come forward for testing.
"It is essential that we find any as yet undetected chains of transmission and break them," she said.
"The earlier we can find a chain of transmission. The earlier [we find it], we can stop it. And I'd like to thank the community for turning out into such high numbers, but I'm actually asking you to redouble your efforts over the coming days so that we can be very confident that we have got containment of that cluster in that area."