Chief Health Officer Kerry Chant said people were looking forward to opening up on Monday but urged everyone to continue wearing masks and maintain physical distancing.
"It's an exciting time but I caution everyone to do everything safely," she said on Friday.
There were 646 new locally acquired cases of COVID-19 and 11 more deaths, reported in the 24 hours to 8pm on Thursday.
That makes 414 COVID-19 deaths since the start of the outbreak in June, including nine men and two women in the last 24 hours.
Premier Dominic Perrottet said NSW would face challenges as the first state leading the way out of months of COVID-19 lockdowns.
"We can't let perfection be the enemy of the good here," he told 2GB radio on Friday.
"The alternative to not doing it this way would be that businesses would have to remain closed to well later in the year."
"This is not going to be complete smooth sailing because no one else has gone down this path."
As of midnight on Wednesday 89.4 per cent of people 16 and over had received their first dose of a vaccine.
Mr Perrottet said the state being on the cusp of 90 per cent first dose jabs made its rates of vaccination amongst the highest in the world.
Some 856 people are in NSW hospitals with COVID-19 with 170 of them in intensive care and 75 on ventilators.
The Australian Medical Association of NSW said changes to the state's plan to emerge from lockdown could overwhelm the hospital system and burn out healthcare workers.
"Relaxing restrictions too soon will not be a 'popular' decision if it means the number of people contracting the virus and ending up in hospital skyrockets," AMA NSW President Danielle McMullen said.
But Katherine Gibney from the Doherty Institute says while COVID case numbers will go up as restrictions loosen, easing out of lockdown is inevitable.
"Hopefully with high vaccination rates we'll be protected against the more severe disease and those requiring hospitalisation and ICU but we are expecting these to increase in the coming weeks and couple of months," Dr Gibney told ABC TV on Friday.
"It has to be done. We can't live in lockdown indefinitely."
A revised strategy to reopen NSW includes ten adult visitors to be allowed in homes, 30 permitted to gather outdoors, and 100 guests at weddings and funerals.
Indoor swimming pools will be able to open and all school students will be back in the classroom by October 25. All teachers will have to be fully vaccinated by the same date.
From Monday people will be able to travel between Sydney, Shellharbour, Wollongong, the Blue Mountains and the Central Coast but not into the regions.
The United Workers Union, which represents many frontline and public-facing workers, is concerned members checking vaccination status could be put in unsafe situations.
The union wants the government to issue clear guidelines to protect public facing workers, and penalties for non-compliance, as well as to implement a simple way to verify vaccination status.
The integrated Service NSW vaccine certificate or passport app is still being trialled with 500 people in regional NSW.
Restrictions will ease further when 80 per cent of the adult population is fully jabbed, expected around October 25, when 3000 people will be allowed at ticketed outdoor events and nightclubs can reopen, though dancing will not be permitted.
Masks will not be required in office buildings in an attempt to encourage workers back to Sydney's CBD.
These freedoms will apply only for the fully vaccinated until December 1, when freedoms are set to be restored for the unvaccinated.