NSW has recorded 262 new local COVID-19 cases and one more death, bringing the toll from the current outbreak to 28.
At least 72 people were in the community while infectious, NSW Health said.
The death was a woman in her 80s who had been a resident at the Wyoming residential aged care facility in Summer Hill. The woman was unvaccinated and she died at Royal Prince Alfred Hospital.
The numbers are down slightly from the 319 cases reported on Saturday, which marked the state's worst day of the pandemic to date.
"As we have seen in the last few days, the numbers are bouncing around a bit, but clearly we need to reduce those numbers," Premier Gladys Berejiklian said on Sunday.
"I urge everybody to please stick to the rules [and] health advice and only leave home if you absolutely have to."
The premier said the Canterbury-Bankstown area of southwestern Sydney remained the epicentre of the virus and had been the focus of police compliance, but the front was also moving further west.
She said 12 suburbs in the Penrith local government area would also be listed as areas of concern and subjected to harsher restrictions from 5pm on Sunday.
These suburbs are Caddens, Claremont Meadows, Colyton, Erskine Park, Kemps Creek, Kingswood, Mount Vernon, North St Marys, Orchard Hills, Oxley Park, St Clair and St Marys.
People in those suburbs will only be able to obtain food and other essentials, and do their exercise, within 5km of home. They will be unable to travel to beyond their LGA unless they are an essential worker.
Current LGAS of concern are Blacktown, Campbelltown, Canterbury-Bankstown, Cumberland, Fairfield, Georges River, Liverpool and Parramatta.
Meanwhile, the premier said case loads in the Georges River area were falling, and the LGA could be removed from the list of areas of concern in coming days if more people came forward for testing.
Almost 60 COVID-19 patients in intensive care
There are currently 362 COVID-19 patients in hospital, with 58 people in intensive care and 24 requiring ventilation.
Of the 58 cases in ICU, five are in their 20s, seven are in their 30s, four are in their 40s, 17 are in their 50s, seven are in their 60s, 15 are in the 70s and three are in their 80s.
Fifty-four of the ICU patients were not vaccinated, while three had received their first AstraZeneca dose and one had received their first dose of Pfizer vaccine.
NSW Police issued 454 penalty infringement notices across the state in the last 24 hours, with people in Sydney's beachside suburbs called out for gathering while exercising.
"We now have an operation that works every single day on the beaches ... making sure people who are exercising continue to do that, that they aren't gathering in spaces which poses a risk to themselves and the community," NSW Police Deputy Commissioner Gary Worboys said.
There were 95,480 COVID-19 tests reported to 8pm on Saturday night, compared with the previous day’s total of 108,449.
NSW Health administered 20,612 COVID-19 vaccines over the same 24-hour period and has now registered 4.4 million jabs in total, as the state works towards a target of six million doses by 28 August.
"That will provide us opportunities to consider what life looks like in September. We are really keen, to really sprint. This is a race," Ms Berejiklian said on Sunday.
"Freedom relies on vaccination."
The premier urged anyone who works in supermarkets, face-to-face food and retail to get vaccinated on Sunday at the vaccination centre at Sydney Olympic Park, which is offering walk-in appointments and is open until 4pm.
NSW Health's Dr Jeremy McAnulty also encouraged people in Dubbo and Mudgee to come forward for testing following positive sewerage detections.
