All people living in Sydney, the Blue Mountains, Central Coast and Shellharbour will be affected.
Those not allowed to leave Metro Sydney
Also, anyone living or working in the 7 LGAs banned by Queensland and Victoria — the city of Sydney, Woollahra, Bayside, Canada Bay, the Inner West, Randwick and Waverley Council — will not be allowed to leave metropolitan Sydney for one week, NSW Premier Gladys Berejiklian announced.
Gatherings limited in Sydney
The state has reverted back to the 'one person per four square metres' rule, which will impact funerals, weddings and venues.
Homes will not be allowed to have more than five visitors, including children.
"We know it is a difficult time given school holidays and I should also say at the outset that these restrictions announced today will be in place from 4pm today for an additional week," Mrs Berejiklian said.
Sydney bar and restaurant rules
At bars and restaurant, all patrons must be seated and cannot mingle.
"Mingling means transferring the virus so these are make sure all consumption at hospitality venues or events has to be seated, and with good social distancing," the premier urged.
Outdoor stadium crowds cut back
No singing or dancing will be allowed at any venue expect for weddings, where only 20 people will be allowed on the dance floor.
Only 50 per cent capacity will be allowed at major outdoor sporting events or other organised events.
Mask rules for Sydney
Masks are already required to be worn in public transport, taxis and indoor spaces where social distancing is not achievable.
From today, masks will also need to be worn in workplaces, sporting events, and gym classes, which are limited to 20 people.
"Please abandon non-essential activities, please don't attend social gatherings unless you absolutely must," the premier said on Wednesday.
“We have to take charge now so we don't have to do anything more severe down the track.
“What we are putting in place now is in a bid to prevent us having to take further action."
More than 44,000 tests were completed in the 24 hours to 8pm on Tuesday.
The spike in infections is a blow for the state and most school holiday plans are now in chaos.
Just two days before public schools break for two weeks, Queensland followed Victoria and New Zealand by imposing bans on travellers from much of Sydney.
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