There were 3057 cases recorded in the 24 hours until 8pm on Monday - 556 more than the previous day's 2501 cases.
There are 284 COVID-19 patients in hospital - up from 261 - and 39 people are in ICU - up from 33.
Two people have died from the virus and 136,972 tests were carried out.
Meanwhile, NSW Opposition Leader Chris Minns is isolating after one of his staffers contracted the virus.
Mr Minns said he had been tested and was awaiting his result at his Kogarah home.
He criticised Premier Dominic Perrottet's refusal to listen to health experts and reintroduce mask mandates indoors.
He says it is putting everyone's Christmas celebrations in jeopardy as cases spiral, forcing thousands into isolation.
"The main thing here is that Christmas isn't ruined and we don't go back into lockdown," he told Sydney radio 2GB.
Introducing mask mandates would make sense and be easy, he said.
"We've gotten used to wearing masks, there's strong evidence they work - preventing the disease from spreading more than it otherwise would."
The Royal Australian College of Physicians is the latest medical body encouraging state and territory governments to reintroduce COVID-19 restrictions to stop the spread of the Omicron variant.
RACP president John Wilson says he is wary of the increasing COVID-19 case numbers in states like NSW.
"If not checked a surge in cases will further burden our already exhausted health systems due to an overwhelming rise in hospitalisations.
"The relaxation of restrictions in some jurisdictions, especially those associated with mask-wearing, QR code check-ins and large gatherings, can have dire consequences," he said.
The NSW vaccination rate remains the same with 94.9 per cent of people aged 16 and older having had one dose, while 93.4 per cent of people are fully jabbed.
Some 81.4 per cent of people aged 12-15 have had one dose of a vaccine and 78.1 per cent have had both doses.
From Tuesday fully vaccinated overseas travellers entering NSW will no longer have to isolate for 72 hours.
Overseas arrivals to Sydney will have to get a COVID-19 PCR test within 24 hours and isolate at home until they return a negative result.
Unvaccinated adult travellers are still required to complete 14 days of hotel quarantine.
The new rules are in line with Victoria but international travellers in NSW must also undergo another test on the sixth day after arriving.
Meanwhile, there are long queues at testing facilities as people seek reassurance they won't have to go into isolation for Christmas and pharmacies and shops are running out of Rapid Antigen Tests.
National president of the Pharmacy Guild of Australia Trent Twomey says there are sufficient supplies in Australia but they need to be distributed to where demand is greatest.
"They are all at their major distribution hubs which are down in Victoria," he told the Nine Network on Tuesday.
Pharmacies would get more deliveries by Wednesday, he said.
