It comes as the coronavirus cluster in the Northern Beaches area grew to around 70 cases on Sunday, with 30 new positive tests returned.
The majority of the new cases - 28 - were linked to the Avalon cluster, with the two remaining cases, both in Northern Beaches residents, yet to be identified.
Authorities have conducted 28,000 tests in 24 hours.
Premier Gladys Berejiklian said the higher number than Saturday was expected but Sydneysiders could take comfort from the local containment of the cluster.
"While the numbers are higher today than yesterday, the one positive is we still have not seen evidence of massive seeding outside the Northern Beaches community and our aim, of course, is to keep that in place," she said on Sunday.
Ms Berejiklian said the lockdown measures also applied to Northern Beaches residents who had left the area on 12 or 13 December and were now on holiday in other parts of Sydney or in regional areas.
“We want you to stay home and follow the same instructions as if you were living on the Northern Beaches,” she said.
The rest of Greater Sydney, including the Blue Mountains and Central Coast, will be under new health orders from Sunday that limit home gatherings to 10 people in addition to those who live in the household.
Indoor venues and places of worship will also revert to the four-square-metre rule, after the rule relaxed to two square metres.
Indoor gatherings will also be limited to 300 people, while weddings will now be capped at 20 people.
Dancing, singing and chanting will also be limited to five people in places of worship.
The orders will remain in place until the end of the lockdown period at midnight on Wednesday.
The NSW premier said it was possible the current restrictions could be extended beyond that date, with a final decision to be made on Wednesday.
"I hope, certainly, that we do see things improved but there is no doubt that having an additional 30 cases in the community is a concern," she said.
Ms Berejiklian has already flagged a possible return to tighter measures in the state capital.
NSW Chief Health Officer Kerry Chant said on Sunday only five of all cases diagnosed so far are not linked to the Avalon Bowlo or Avalon RSL, the two venues at the centre of the cluster.
Overnight, authorities issued a number of new public health alerts.
Hundreds of people who attended Anytime Fitness on Avalon Parade on or after 8 December are now considered "close contacts" and should get tested immediately and isolate for 14 days after their most recent visit to the gym.
Anyone who attended the gym between Monday 23 November and Monday 7 December should get tested and isolate until they receive a negative result.
Confirmed cases of COVID-19 have also visited a number of locations around Sydney, including Oceana Traders seafood restaurant in Avalon on various dates in the last week, and Nomad Restaurant and Strawberry Hills Hotel in Surry Hills on 16 December.
A full list of venues with COVID-19 health alerts can be found here.
Northern Beaches residents are under stay-at-home orders last imposed back in March at the height of the COVID-19 crisis.
The lockdown lasts until Wednesday in an effort, Ms Berejiklian said, to give Sydney a chance for a semi-normal Christmas.
People are permitted to leave their homes for five basic reasons: to seek medical care, exercise, grocery shop, work or for compassionate care reasons.
NSW Minister for Health Brad Hazzard urged everyone across Greater Sydney to wear masks.
"I am asking and the government is asking all residents of the Greater Sydney area to wear masks at least for the next few days until we revisit this issue on Wednesday. But it may well be wise to wear those masks going through Christmas, New Year in the Greater Sydney area," he said on Sunday.
State border restrictions
Victoria has banned residents of Greater Sydney, including the Central Coast and the Blue Mountains, from travelling to Victoria from midnight on Sunday with Premier Daniel Andrews declaring the entire region a red zone.
Anyone who enters the state after that time will be subjected to 14 days of hotel quarantine.
Returning Victorians have an additional 24 hours to make the trip home, where they will be expected to self-isolate for 14 days at home and get tested.
Those arriving after midnight on Monday will also be subjected to hotel quarantine arrangements, but they will not be expected to pay for it.
Queensland authorities have announced the state will close its border to residents from Greater Sydney, with the region being declared a hotspot from 1am on Monday.
Anyone who has been in Sydney, the Blue Mountains, the Central Coast and the Illawarra-Shoalhaven People since 11 December will not be allowed into the state without an exemption. If granted, they will be required to go into hotel quarantine for 14 days.
Queenslanders will have another 24 hours - until 1am on Tuesday - to get back home but will need to be tested for the virus and quarantine in their home, if suitable, for 14 days.
South Australia will also require residents of Greater Sydney to quarantine for 14 days from midnight on Sunday, while those from the Northern Beaches have been banned from entering the state.
People from regional NSW will not require quarantine but everyone from the state will be tested on arrival with testing stations established at border checkpoints.
Tasmania, the ACT and the NT are also requiring visitors from Greater Sydney to undergo a mandatory 14-day quarantine period.
Travellers to the ACT have until midnight on Sunday before the orders take effect, while the bar on Sydney arrivals entering the NT and Tasmania are already in effect.
Genomic sequencing has connected the cluster to a US strain of the virus, which may have entered NSW in a returned traveller in early December.
That traveller has never left the hotel quarantine system, and the connection between that case and the northern beaches remains unclear.
With additional reporting by AAP.
People in Australia must stay at least 1.5 metres away from others. Check your jurisdiction's restrictions on gathering limits.
If you are experiencing cold or flu symptoms, stay home and arrange a test by calling your doctor or contact the Coronavirus Health Information Hotline on 1800 020 080.
News and information is available in 63 languages at sbs.com.au/coronavirus. Please check the relevant guidelines for your state or territory: NSW, Victoria, Queensland, Western Australia, South Australia, Northern Territory, ACT, Tasmania.