Mr Hazzard received a text from NSW Health overnight informing him he has been in close contact with a likely coronavirus case.
He was exposed at NSW Parliament House but was not experiencing any symptoms, he told ABC TV on Thursday.
"I'm talking about somebody who works for NSW Parliament who may be a positive case," he said.
"We (in Sydney) have obviously a clear danger... and now I'm on the receiving end."
Mr Hazzard admitted it "was likely" other MPs could be affected.
NSW Parliament is sitting this week and on Wednesday four coalition MPs went into isolation after dining at a Paddington pizzeria that's since been declare a virus exposure site.
NSW is likely to report more more Covid-19 cases on Thursday but Mr Hazzard played down fears Sydney is on the brink of a lockdown.
"I don't believe that we will go into a lockdown," he said.
Meanwhile, school holiday plans are in tatters for many Sydney residents, with many confined to the metropolitan area, as NSW struggles to contain a coronavirus cluster that's blown out to 31 infections.
Premier Gladys Berejiklian is urging people to "abandon non-essential activities" after introducing new rules for residents in Greater Sydney, the Central Coast, Blue Mountains, Wollongong and Shellharbour on Wednesday.
A household guest limit of five, including children, and the four-square-metre rule indoors and outdoors were introduced alongside mandatory masks in all indoor non-residential settings, including workplaces.
"The NSW government will not hesitate to go further and harder if we have to," she said.
Meanwhile, NSW Health has issued more alerts for Covid-19 exposure sites at a range of venues at Darlinghurst, Double Bay, Bondi Beach, Bondi Junction, Narellan, Meadowbank and the Sydney CBD.
Overall, there were 16 new cases reported on Wednesday, taking the total number of infections to 31.
New border restrictions for Sydney
Residents who live or work in the City of Sydney, Waverley, Randwick, Canada Bay, Inner West, Bayside, and Woollahra local government areas cannot travel outside the metropolitan area unless it's absolutely essential.
Masks must also be worn to gym classes, which are now limited to 20 people.
Eight of the 13 additional cases were at a birthday party attended by about 30 people in West Hoxton on Saturday, which NSW Chief Health Officer Kerry Chant described as a "superspreader event".
Other states have hardened their borders days before NSW public schools break for two weeks.
WA has closed its border to NSW for anyone who had been in the state since June 11 or in the 14 days prior to travel.
SA has also closed its border with NSW, excluding a 100km buffer zone for cross border communities.
Tasmania has declared seven Sydney local government areas as high risk.
Queensland has closed its border to people from Greater Sydney, the Central Coast, Blue Mountains, Wollongong and Shellharbour.
Victoria has also already banned people from the seven "hot zones".
New Zealand has paused its travel bubble with NSW.
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