The Bureau of Meteorology is warning the intense rain forecast for Sydney and surrounds - as much as 200mm - will hit late on Wednesday and early Thursday.
Warragamba Dam has begun to spill, with Water NSW warning it may continue for up to two weeks, threatening thousands of homes in the Hawkesbury and Nepean area.
Meanwhile, the body of a woman in her 80s was found inside a South Lismore house on Tuesday afternoon, the second elderly woman to died trapped in her flooded home in the area in recent days.
There are also grave fears for a man who disappeared in floodwaters in Lismore on Sunday.
Lismore Mayor Steve Krieg says the flood-ravaged city is bracing for more deaths as Fire and Rescue crews search homes and businesses "probably with the sole purpose to make more grim discoveries, unfortunately".
"There's so many houses to go through. So many people still unaccounted for," he told ABC TV on Wednesday.
"That is, unfortunately, the main job of the day today and we just really need people to stay away ... to let these people do the worst job imaginable."
Premier Dominic Perrottet will visit Grafton on Wednesday to be briefed about the widespread floods engulfing northern NSW communities.
Ballina Hospital was evacuated on Tuesday night due to rising floodwaters, with 55 general medical and rehabilitation patients, moved to Xavier Catholic College.
An evacuation order was issued just after midnight for Ballina Island, with the SES warning the CBD expected to be inundated on Wednesday, isolating the community.
The BOM has issued several flood warnings for the Greater Sydney area, including the Upper Nepean at Menangle, the Hawkesbury River at Richmond and Windsor, and the Colo River at Upper Colo and the Georges River.
The communities in the path of the floods are the same ones devastated by floods just a year ago and thousands of people spent the night frantically sandbagging their homes and businesses.
People in low-lying areas around Windsor and Pitt Town, northwest of Sydney, have been warned to prepare to evacuate.
The slow-moving system arrived in Sydney late on Tuesday, with heavy rainfall over parts of the Hunter and Metropolitan, Illawarra, South Coast and parts of Central Tablelands and Southern Tablelands.
The intense rainfall and thunderstorms could also cause life-threatening flash-flooding, while wind gusts could exceed 90km/h in some areas.
Emergency Services Minister Steph Cooke says it is too early to know exactly how many homes in western Sydney will be impacted by the overflowing Warragamba Dam.
"We know there's 130,000 residents in and around that area. It depends on exactly where the rain drops and how much it drops, so we are on high alert," she told the Seven Network.
While the rain has eased in the Northern Rivers region, the disaster is ongoing with some 35,000 people ordered to evacuate.
Lismore residents are no stranger to floods but the most recent inundation of the town has been far worse than expected.
The Wilsons River at Lismore peaked near 14.4 metres on Monday afternoon after a levee was overwhelmed by rising waters in the early hours of the morning.
Thousands of people have lost everything and are sheltering at evacuation centres.
Seventeen councils in northern NSW have been officially declared disaster zones.
The floods come against the backdrop of the landmark Intergovernmental Panel on Climate Change report released this week where scientists warned the nation is barrelling towards a future full of environmental disasters.