As part of a long awaited back-to-school plan announced on Sunday, two rapid tests will be handed out to pupils and staff for four weeks across primary and secondary schools.
Early education and childcare centres will also be included in the scheme.
Schools will not be closed when there is a positive case, with no contact tracing for students and staff. However parents and guardians will be notified when infections are identified within child cohorts.
NSW Premier Dominic Perrottet says it's the right decision for students to return to face-to-face learning amid the Omicron wave.
"I know many parents are anxious but ultimately we know kids do better in the classroom," he told reporters.
"Some students in our state have already missed a quarter of their schooling. It is what is best for mental health and social outcomes."
Victorian Premier Daniel Andrews said it is "critical" students return to schools.
"It will be difficult and there will be challenges away not all be smooth, but the benefits of that far outweigh any other policy approach, we cannot have kids at home anymore, because Victorians have got vaccinated, is that there will be asked them to do," he said.
NSW Education Minister Sarah Mitchell said four million RAT kits had already been distributed to school communities and a further two million will be delivered by Tuesday evening, ahead of students returning to classrooms on February 1.
Schools will contact parents about how and when to pick up the tests.
All students and staff are asked to use a rapid test before their first day back and continue to carry out surveillance tests twice a week for the first four weeks of term one.
If a student tests positive, parents are asked to notify their principal and keep their child at home.