Premier Gladys Berejiklian has announced patrons will be allowed to stand inside pubs next month if NSW continues on its current trajectory which has seen no locally acquired coronavirus cases recorded in the past 38 days.
Ms Berejkilian said the restriction is scheduled to be rolled back on March 17 and called it "positive news".
"If everything goes well, in three weeks time you will be able to stand up and have a drink indoors as well as outdoors," she told reporters.
The announcement will be welcome news to patrons and those in the hospitality industry with venues forced to reduce capacity to accomodate the previous no standing rule, or face heavy fines if customers were found to be breaching the restriction.
Currently pubs in Greater Sydney must abide by the one customer per two square metres rule.
The rule of no standing inside pubs while drinking was introduced in July last year.
Ms Berejiklian also announced from Friday 50 people will now be allowed inside someone's home.
Thirty people will also be allowed on a dance floor at a wedding.
There will be 50 people allowed in gym classes, while indoor choirs can now number 30.
While the state was easing restrictions, Ms Berejiklian warned "we cannot let our guard down".
"Even though we are easing restrictions it's more important than ever to make sure we check in when we go to venues, keep our social distance, get tested if we have the mildest of symptoms and make sure we follow all the other rules."
More than 3200 people were vaccinated in three NSW hubs in the first two days of the rollout, Ms Berejiklian said.
Do you have a story tip? Email: firstname.lastname@example.org.