The restrictions will apply to residents living in Greater Sydney, the Blue Mountains to the west and the Illawarra region, south of Sydney.
The state's Premier Glady Berejiklian fast-tracked the restrictions in an attempt to conserve water amid an ongoing drought and dropping dam levels.
Sydney Water senior advisor Peter Hadfield says the restrictions impact how people use water outside of the house.
He said, "Everyone is going to have to put their hose and sprinklers away. You can only water your garden before 10am or after 4pm and it is only with a watering can or a bucket. The use of unattended hoses isn't permitted and hosing of hard surfaces isn't permitted either. You can only wash your car with a bucket or at a commercial car wash, not with your hose. You can top up your pool for 15 minutes so you maintain the water level above your skimmer box line.
Fines will apply for those found breachuing the restrictions.