Premier Gladys Berejiklian said all of the state would remain in lockdown until at least August 28.
A man in his 80s from southeast Sydney died at St George Hospital, bringing the number of COVID-related deaths to 61 since June 16.
There are 474 COVID-19 cases admitted to hospital, with 82 people in intensive care, 25 of whom require ventilation.
The premier said she was pleased that 53 per cent of the population have had at least one dose of a vaccination and 28 per cent are now fully vaccinated.
It comes after a leading epidemiologist warned daily COVID-19 case numbers could spiral to more than 2200.
After eight weeks of lockdown NSW reported 633 new locally acquired cases on Wednesday, smashing the previous daily record by 155.
Professor James McCaw - who specialises in infectious disease dynamics - says daily infection numbers could skyrocket in the next month.
"Our models show the possibility of increases and decreases, but I think it's more likely to be well over 1000 and up to 2000 within a month or so," he told Nine newspapers on Thursday.
The thousands of unlinked cases mean the situation was likely to deteriorate, he said.
NSW Opposition Leader Chris Minns said no one wanted a stricter lockdown "but the alternative is too grim to bear at this point".
"We can't face a prospect of 2000 daily cases. It would be too much of a stretch on our health system," he told the ABC on Thursday.
Meanwhile, elective surgeries at nearly 30 private hospitals have been suspended so staff can be redeployed to plug gaps in the public system and administer vaccines.
The state also recorded a record number of vaccinations in a single day.
Some 109,550 NSW residents received a jab on Tuesday, taking the vaccine coverage for people over 16 to 54 per cent (with at least one dose).
Vaccine hubs are popping up across western and southwest Sydney, as authorities try to get 530,000 Pfizer doses into the arms of under-40s in those areas in under three weeks.
Meanwhile, the virus has continued its spread in regional NSW.
The Dharriwaa Elders Group in Walgett - which Ms Berejiklian has said is "of enormous concern" - is calling for more data on rates of vaccination of Indigenous people.