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Parts of regional NSW that have had no COVID-19 cases in the past fortnight will be released from lockdown at midnight on Friday.
Premier Gladys Berejiklian said on Thursday the areas enjoying new freedoms from the weekend will still have some restrictions "to make sure we limit the spread of disease in our regional communities".
Parts of the mid-north coast, including Coffs Harbour and the north coast, will emerge from lockdown on the weekend; so too will the Riverina and Murrumbidgee areas, including Wagga Wagga and Albury.
Major outdoor recreation facilities like stadiums, racecourses, theme parks and zoos can reopen with one person per four square metres, capped at 5000 people.
Up to 500 people can also attend ticketed and seated outdoor events and entertainment centres including cinemas and galleries will reopen with 75 per cent of their fixed seated capacity.
Weddings and funerals will be limited to 50 people, with churches and places of worship to open subject to the four square metre rule and no singing.
Lockdown will continue for the southern parts of the state, the southeast, the Illawarra, the Shoalhaven, Hunter, Central Coast, central west and parts of the far west.
In the areas where stay-at-home orders have been lifted, masks will be mandatory at indoor public venues, with hospitality venues, shops, and hairdressing and nail salons all able to reopen with restrictions.
Up to to five people will be allowed in a home and up to 20 can gather outdoors.
Gyms and sporting facilities can also open with conditions.
However, Deputy Premier John Barilaro warned stay-at-home orders could return if even one new local COVID-19 case was recorded.
"You are not coming back to a pre-lockdown environment," he said.
"There will be capacity limits for our hotels, cafes and restaurants, including the four square metre rule, mask-wearing, social distancing," he told reporters.
While face-to-face learning in schools will return for those LGAs out of lockdown, certain activities won't resume - including community sport.
Mr Barilaro said people there could return to shopping, working and enjoying time with family and friends albeit with restrictions.
"Schools will return, and they return at a Level 3 COVID plan within schools, which means no extracurricular activities, no assemblies, there's a range of mask-wearing provisions."
There were dozens of cases of the virus recorded in regional NSW in the 24 hours until 8pm on Wednesday, with infections increasing significantly in the Illawarra Shoalhaven and Central Coast.
NSW Chief Medical Officer Kerry Chant urged people there to get tested and vaccinated.
In western NSW 24 cases were recorded, 22 on the Central Coast, 23 in the Illawarra Shoalhaven, 12 in the Hunter New England and four in the far west.
There were also three cases recorded in the southern part of the state.
Of the new cases in the west 15 were recorded in Dubbo, with one of them in the aged care facility St Mary's Villa. It means there are now eight cases connected to the centre.
The new cases bring the total number of infections in western NSW to 908 with the majority of those in Dubbo.
Further north, the virus has been detected in sewage in the outback town of Lightning Ridge, despite no cases being recorded in the area.
"Please stay vigilant, if you've got any signs or symptoms come forward and get tested," Western NSW Local Health District chief executive Scott McLaughlin said.
Mr Barilaro offered hope to the 38 regional local government areas that remain under lockdown, saying restrictions could ease when there have been no cases in the area for 14 days.
"We look at sewage surveillance, exposure sites. They're the thresholds we've set with NSW Health that will either put someone back into lockdown or have the opportunity for some to come out," he said.
"It is a bittersweet day for the regions. Some areas will open up to a restricted environment and other areas won't."