NSW has recorded 608 new locally acquired cases of COVID-19 and another seven people have died, as schooling and elective surgery resumes in some areas.
The daily case numbers are the lowest since August and it is the fourth day in a row with fewer than 700 cases.
But NSW Health's Dr Jeremy McAnulty said there had also been "slight decline" in testing numbers.
"We really encourage people to come forward for testing as we get closer to more people getting vaccinated in the community," Dr McAnulty said in an update on Tuesday.
"It is really important we all maintain our vigilance for symptoms and come forward for testing so we don't miss cases."
There were 85,642 COVID-19 tests reported to 8pm on Monday.
Six men and one woman with COVID-19 have died, bringing the toll for the current outbreak to 385 deaths.
Five of the people who died were not vaccinated, while two had received one dose of a COVID-19 vaccine.
There are 978 people in hospital with COVID-19 in NSW, with 190 in intensive care, and 94 on ventilators.
Across the state, 88.6 per cent of people aged 16 and over had received their first vaccine, and 67.7 per cent were fully vaccinated as of midnight on Monday.
Meanwhile, more than 140,000 students in NSW regional communities have returned to face-to-face learning at school for the start of term four.
With COVID-19 restrictions eased across many parts of rural and regional NSW, 721 schools - almost a third of the state's public schools - have welcomed all students back on site.
COVID-safe settings will include QR-code check-ins, no visitors, restricted activities, increased hygiene practices and the wearing of masks.
Education Minister Sarah Mitchell said the staggered return to school will continue from October 18.
"After a disrupted term three, it is more important than ever that students receive the academic, social and wellbeing benefits of being in the classroom," she said on Tuesday.
"I know there remain some concerns in the community around the return to school, but students, staff and parents should feel confident our schools are as safe as possible."
Restrictions have also eased in 19 private hospitals in NSW where non-urgent surgery resumes on Tuesday after it was cancelled in late August due to the pandemic.
Non-urgent surgery at public hospitals remains postponed.
"This is to ensure we retain adequate system capacity, as well as patient, staff and public safety, for the delivery of healthcare services during the COVID-19 response," NSW Health said in a statement.
In regional NSW, stay-at-home orders are underway for the Lismore local government area and the town of Casino.
Gunnedah has also gone into lockdown, after five new cases were detected. Anyone who has been in the local government area since September 27 must also isolate.
While Port Macquarie will also be freed from lockdown from Wednesday morning, nearby Forster, Tuncurry and Taree have returned to stay-at-home orders.
But the state is nearing its 70 per cent double dose vaccination target, which should trigger an easing of restrictions on October 11.
In his first press conference after being elected NSW Liberal party leader and premier, Dominic Perrottet said he would meet with Health Minister Brad Hazzard to discuss "issues" with the roadmap.
"There are a number of issues that need to be looked at, and obviously, health is our number one priority right now and I will sit down with the minister and the whole team this afternoon," Mr Perrottet said on Tuesday.
When asked whether he would give people in NSW an early mark and ease restrictions before they are scheduled to, the premier said lockdown would still end on October 11.
Australian Associated Press
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