Masks will become mandatory for many indoor settings in Sydney as NSW reports seven new cases of COVID-19 community transmission and imposes more restrictions.
After steadfastly opposing the idea, Premier Gladys Berejiklian said the change of heart balanced the health risk and security of citizens but allowed businesses to continue operating.
"What we want to do is make sure we're not in a situation where we are restricting people's ability to go about their business," Ms Berejiklian said on Saturday.
"In fact, we want to increase economic activity, not diminish economic activity, and mask-wearing in these settings will ensure we have the confidence to do that."
From midnight on Saturday, masks will be mandatory in shopping centres, on public transport, in places of worship, hair and beauty premises and entertainment venues such as cinemas.
All hospitality staff are also required to wear one, with anyone disobeying the health order risking a $200 fine from Monday.
Children under 12 and those with specific health disorders are exempt but are encouraged to wear masks where possible.
Stay-at-home orders will continue for residents north of the Narrabeen Bridge in the northern beaches until at least January 9, while people in the southern half of the region will have the same restrictions as the rest of greater Sydney.
Five of the new cases are from western and southwestern Sydney and are linked to the Berala cluster, which now totals seven with the original source of infection a man in his 40s.
Four are from the same household and one new source of infection is being investigated after 32,000 tests were conducted in the 24 hours to 8pm on Friday.
Greater restrictions imposed on businesses and gatherings include gym classes reduced to 30 people and places of worship and funerals limited to one person per four square metres, and up to a maximum of 100 people per separate area.
Outdoor performances and protests are reduced to 500 people and controlled outdoor seated events reduced to 2000.
However, Ms Berejiklian has defended allowing the Australia-India Test match to be played at the Sydney Cricket Ground from January 7.
At least 20,000 people are expected to attend the match each day.
"We appreciate what people might say about us continuing to hold those events, but also consider the thousands of jobs it keeps, consider the sense of normality it gives us", Ms Berejiklian said.
Three cases of community transmission were reported on Friday, while the state government is still urging western Sydney residents from Greystanes, Auburn, Berala and Lidcombe with even the mildest of symptoms to get tested.
NSW Health expanded its list of exposure sites on Friday evening, saying anyone who visited BWS in Berala between 22 and 31 December must get tested immediately and isolate.
On Saturday it said anyone who visited the BWS between certain times on all days of this period is considered a close contact and must get tested and isolate until they receive further advice, regardless of whether a negative result is received.
All those who visited the Coffee Club at Stockland Shellharbour for an hour or more between 11.30am and 12.45pm on December 27 is also considered a close contact and must immediately get tested and isolate for 14 days.
Anyone who visited Australian Motor Traders in Haberfield and Officeworks in Punchbowl on the afternoon of December 29 has been told to get tested and self-isolate until receiving a negative result.
Meanwhile, Victoria shut its border to NSW overnight after the decision announced on Thursday prompted a scramble for holiday-makers rushing to get home.
The ACT has also updated restrictions from midday on Saturday requiring anyone travelling to the state from a COVID-19 hotspot in NSW to provide an exemption.
The Tasmanian government says NSW's Wollongong area will join greater Sydney as a medium-risk area, meaning arrivals from there will have to quarantine for 14 days.