NSW will ease a host of restrictions on indoor and outdoor gatherings, plus scrap compulsory face masks in shops, as it notches up 10 consecutive days without a new local COVID-19 case.
The state recorded zero local COVID-19 cases in the 24 hours to 8pm on Tuesday, as well as two cases in travellers in hotel quarantine.
Premier Gladys Berejiklian on Wednesday afternoon announced that gathering and function restrictions would ease from Friday.
NSW residents could invite up to 30 people inside their homes, while picnics and other outdoor gatherings - including in yards - can number 50 people.
Attendee caps at weddings and funerals have been lifted to 300 people, while caps have been removed altogether on corporate events, religious gatherings and hospitality venues. However the "four square metre" rule still applies.
Ms Berejiklian said restrictions limiting venues to one person per four square metres may be revised to two square metres in a fortnight.
"We have the most robust quarantine system in Australia but we know that there's no such thing as a perfect system, and the risk of an outbreak is there," Ms Berejiklian told reporters.
"We need to make sure that if one does occur, that we don't create a super-spreading event."
Rules on mask usage around Greater Sydney would also change, with usage no longer mandatory in retail settings.
However residents will continue to be obliged to wear a mask on public transport, at religious gatherings, in gaming rooms and while working in a public-facing role in hospitality venues.
Ms Berejiklian said mask usage on public transport would be important to coax Sydney CBD workers back to office work.
"In relation to the public, we recommend a mask when you can't guarantee social distancing. But it will not be compulsory if you're going retail shopping or if you're a retail worker or obviously if you're attending a hospitality venue," Ms Berejiklian said.
Current rules dictate that masks are compulsory indoors in Greater Sydney, the Central Coast and Wollongong, while five visitors are allowed in homes and a maximum of 30 people can gather outside.
NSW Health, meanwhile, is urging people in southwest Sydney to monitor for COVID-19 symptoms after virus fragments were detected in sewage at the Liverpool waste treatment plant.
They also called for higher COVID-19 testing rates, with fewer than 10,000 tests recorded in NSW in the 24 hours to 8pm on Tuesday.
"The continuing low testing numbers is a concern as the virus may still be circulating in the community," Dr Jeremy McAnulty said in a statement.
Australian Associated Press