"All individuals aged 18 years and above in greater Sydney, including adults under 60 years of age, should strongly consider getting vaccinated with any available vaccine including COVID-19 Vaccine AstraZeneca," ATAGI said in a statement.
"This is on the basis of the increasing risk of COVID-19 and ongoing constraints of Comirnaty (Pfizer) supplies.
Increased vaccine protection comes with two doses of a coronavirus vaccine.
ATAGI is now also recommending a shorter recommended time interval between the first and second doses of the AstraZeneca vaccine.
"In addition, people in areas where outbreaks are occurring can receive the second dose of the AstraZeneca vaccine four to eight weeks after the first dose, rather than the usual 12 weeks, to bring forward optimal protection."
NSW records 163 new local COVID-19 cases as numbers continue to rise
Deputy chief medical officer Michael Kidd said ATAGI's decision is also informed by "the emerging data about the severity of disease".
"It is becoming apparent that the Delta variant may be more severe than the original strain of the virus. The proportion of infected people less than 60 years of age requiring hospitalisation now appears to be higher than what was reported in outbreaks with the original strain.
"So this also reinforces the protection of the benefit with either vaccine."
NSW on Saturday recorded 163 new cases of COVID-19, with at least 45 people infectious in the community.
The Australian Medical Association on Friday said it had contacted the co-chairs of the ATAGI asking them to reconsider the advice for young Australians, given the outbreak in Sydney.
The AMA's vice president, Chris Moy, said it is important the messaging from government and health officials on AstraZeneca is clear.
"There is an irrational fear about the AstraZeneca vaccine," he told SBS News. "I have had both shots of (AstraZeneca) and I am 54."
He said those under 40 should also be strongly considering the use of AstraZeneca.
"I think if you are in Sydney at the moment, and you are second-guessing having the AstraZeneca vaccine, it doesn't make sense.
"There is a really incredibly rare chance of getting the blood clotting disorder. And you really should be getting out there and getting it as soon as possible. Because not only will you be protecting yourself, but you will be protecting those around you."
Dr Moy said the growing case numbers in Sydney in spite of lockdown measures underlines the urgent need to boost vaccine rates.
"It is an absolute no-brainer to try and get as many people as vaccinated as possible.
"We need to get those vaccines into people's arms not only to protect individuals from getting serious disease. Because even one dose of AstraZeneca will reduce your chance of ending up in hospital by 71 per cent. And the second one will reduce it by 92 per cent.
"We know that even one shot of either vaccine reduces the transmission by about 50 per cent."
'Oceans of AstraZeneca'
On Friday, NSW Health Minister Brad Hazzard that there was an excess of AstraZeneca vaccines sitting untouched as Sydneysiders, including those aged over 60, wait for Pfizer.
He pleaded with them to reconsider, putting "survival" first.
"There are oceans of AstraZeneca in New South Wales. There is also vast amounts of virus in south-west and western Sydney. All we are saying here at the moment is your obligation to yourself, to the community, to New South Wales and to Australia, because this could leak further into other states, is to go and get the jabs of AstraZeneca."
Those under 40 can request the AstraZeneca vaccine from their GP. The state's mass vaccination clinics are still operating on the basis of the previous ATAGI advice offering AstraZeneca only to those aged 60 and older.
The ATAGI advice was incrementally adjusted earlier this month to urge those under 60 to consider the use of AstraZeneca in "outbreak setting" such as Sydney.
Australians under 60 were urged to "reassess the benefits to them and their contacts from being vaccinated with COVID-19 vaccine AstraZeneca, versus the rare risk of a serious side-effect".
A study published this week in the New England Journal of Medicine found that Pfizer was approximately 90 per cent effective against the Delta variant and AstraZeneca was about 70 per cent effective.