NSW has reported a record 239 new locally acquired cases of COVID-19 and at least 88 of those people were circulating in the community for all or part of their infectious period.
Two people - a southwest Sydney woman in her 90s and man in his 80s - have died, taking the toll for the current outbreak to 13.
Greater Sydney and surrounding regions are in lockdown until at least August 28 as health authorities battle an outbreak of the virulent Delta strain. Of the record 239 cases - which surpasses the 212 cases recorded on March 27, 2020 - at least 22 were in the community for part of their illnesses and 66 were infectious in the community.
The isolation status of 70 cases remains under investigation. The source for 126 is still under investigation.
"We can only assume that things are likely to get worse before they get better given the quantum of people infectious in the community," Premier Gladys Berejiklian told reporters on Thursday.
"Can we stress again, as we have in the past weeks - most of these transmissions are occurring amongst households and in workplaces, but also in health settings."
The 239 cases came from almost 111,000 COVID-19 tests. There are 54 COVID-19 patients in NSW in intensive care, with 22 ventilated.
The government on Wednesday introduced new measures targeted at two million people in eight western Sydney local government areas where people cannot leave the area unless they are essential workers.
On Thursday, Ms Berejiklian said the government had accepted police advice the eight virus-hit LGAs would be subject to mask mandates at all times, including outdoors.
Residents of those areas will also be limited to moving within 5km of home. Meanwhile, nine young people - including eight teenagers - are accused of breaking stay at home orders and becoming involved in a high-speed pursuit with police in the NSW Hunter.
NSW Police say the teens were travelling in a Honda Civic and clocked driving 200km/h in a 110km zone.
Ms Berejiklian is facing criticism from one of her MPs, after keeping the Shellharbour region in lockdown despite no cases since October. The decision was "bereft of common sense," Kiama MP Gareth Ward said.
"If COVID was rife in the Illawarra and if there were zero cases in Sydney, Sydney wouldn't be in lockdown," the Liberal MP tweeted.
The Blue Mountains, Central Coast and Wollongong are also included in the extended lockdown. Other lockdown measures announced on Wednesday included more financial support for businesses and workers, a singles bubble for people who live alone and a partial reopening of the construction sector from Saturday.
Year 12 students will also be able to return to school on August 16, with rapid antigen testing used to halt the virus at the school gate.