The heritage-listed Warragamba Dam, located about 70km from central Sydney, started spilling mid-afternoon on Saturday, as rain continues to batter parts of NSW.

The volume of water is expected to increase into Sunday as rainfall and flooding continues, Water NSW said.

Premier Gladys Berejiklian said on Saturday afternoon she had been briefed on the dam situation "in relation to a potential for a one-in-five-year, one-in-10-year, or one-in-20-year event".

"All three scenarios being planned for," she said.

She warned residents in the catchment area, as well as those in the mid-north coast, the Hunter, central coast and metropolitan Sydney to be on high alert and ready to evacuate.

Flood expert Jamie Pittock is less concerned about the Warragamba Dam spilling as he is about tributary rivers downstream from it, such as the Grose River, overflowing and flooding parts of western Sydney.

"There are around 5000 houses (in western Sydney) that lie below the one-in-100-year flood return interval," the Australia National University professor told AAP.

Most housing developments around the world are not allowed to be built in a one-in-100-year area, but successive NSW governments have allowed the irresponsible building of housing in these low-lying locations, Prof Pittock said.

"It's always worrying when there's a flood in western Sydney because it's one of the most dangerous places in Australia for floods."

Prof Pittock said he was most concerned about Penrith, Richmond and Windsor.

Bureau of Meteorology national flood services manager Justin Robinson said a spill at Warragamba Dam could lead to minor flooding in Sydney's west, specifically at Penrith and North Richmond later on Saturday.

"It's a very dynamic and evolving flood situation and we could see some very deep and rapid responding rivers with very high levels," he said on Saturday.

Other dams such as Nepean, Cataract, Cordeaux and Avon are also expected to reach capacity and begin spilling on Saturday afternoon, Water NSW said.

The mayor of Wollondilly Shire Council, the local government area in which Warragamba Dam is located, told AAP he was concerned about flooding in lower areas.

Robert Khan cannot remember the dam spilling over in his nearly 40 years of living in the area and said businesses on the main street of Picton were currently sandbagging their stores.

"We've had drought, bushfires and floods. I know it's mother nature but how much can a local business take?" he said.

The dam spill has occurred amid the NSW government's controversial plans to raise the dam wall by at least 14 metres to potentially hold back additional water in the Blue Mountains.

Australian Associated Press