NSW recorded 608 new Covid-19 cases on Tuesday, the lowest number of cases the state has had since August.
NSW health also reported seven deaths, six men and one woman. Five of those people were not vaccinated while two had received one dose of a Covid vaccine.
The most recent vaccination rates show 67.5 per cent of eligible people in NSW are fully vaccinated against Covid, with 88.5 per cent of people over the age of 16 having one dose.
Dr Jeremy McAnulty said there are currently 978 people admitted to hospital, with 190 people in intensive care, 94 of which require ventilation.
He urged people to come forward for testing as soon as symptoms appear, saying by doing so it will help prevent spread within the community.
"We're seeing a decline in numbers in recent days, but we've also seen a slight decline in testing," he said.
"So we really encourage people to come forward for testing as we get closer to more people being vaccinated in the community.
"It's really important we all maintain our vigilance for symptoms and come forward to testing so we don't miss occasions, finding people with Covid we can help."
Meanwhile, some private hospitals in NSW have resumed non-urgent surgery.
Day surgeries, which were cancelled in late August due to the pandemic, will resume at 19 private hospitals from Tuesday, but non-urgent surgery at public hospitals remains postponed.
"This is to ensure we retain adequate system capacity, as well as patient, staff and public safety, for the delivery of healthcare services during the Covid-19 response," NSW Health said in a statement.
"Emergency surgery and urgent elective surgery will continue to be performed in public hospitals during this challenging period."
Thousands of kids head back to school
More than 140,000 students in NSW regional communities have returned to face-to-face learning at school for the start of term four.
With Covid-19 restrictions eased across many parts of rural and regional NSW, 721 schools - almost a third of the state's public schools - have welcomed all students back on site.
Covid-safe settings will include QR-code check-ins, no visitors, restricted activities, increased hygiene practices and the wearing of masks.
Education Minister Sarah Mitchell said the staggered return to school will continue from October 18.
"After a disrupted term three, it is more important than ever that students receive the academic, social and wellbeing benefits of being in the classroom," she said on Tuesday.
"I know there remain some concerns in the community around the return to school, but students, staff and parents should feel confident our schools are as safe as possible."
Do you have a story tip? Email: email@example.com.