Three family members diagnosed with COVID-19 in hotel quarantine picked up the virus from fellow returned travellers, NSW Health has confirmed.
Health detectives believe the three cases picked up the virus from a family of four who stayed in the adjoining room of the Adina Apartment Hotel at Sydney's Town Hall.
Health was tipped off to the transmission after all seven people had the same sequence of the virus, despite arriving from different countries at different times.
The three cases have now been reclassified as locally acquired instead of overseas acquired, the government said on Sunday.
NSW Health is investigating how the transmission occurred. The first family is believed to have been infectious between April 8 and 11.
All guests on the 12th floor of the hotel, where the families stayed, have been retested and returned negative results. Staff who worked on the floor are self-isolating and being tested.
All seven people have been transferred to special health accommodation, where they will stay until they're no longer infectious.
NSW has 67 COVID patients, including one in intensive care.
Six cases were recorded in hotel quarantine in the 24 hours to 8pm on Saturday, from 8088 tests.
Some 550 people were vaccinated in that period, bringing the NSW total to 173,852.