The state reported 11,201 cases on Wednesday with 157,758 tests in the last 24 hours.
There are now 625 people in hospital with the virus, with 61 of them in intensive care, one more than on Tuesday.
NSW also announced a further three deaths.
The new figures came as demand pushed testing centres beyond capacity.
Thousands of people across NSW - including travellers required to have a negative PCR test before arriving in Queensland - queued for hours to be swabbed.
Queensland has now announced it will accept rapid antigen tests instead of PCR tests for travellers from interstate hotspots from January 1.
The NSW Premier Dominic Perrotet was pleading with the Queensland government on Tuesday to change its border entry requirements.
Mr Perrottet said "tourism testing" was clogging up the already overwhelmed testing system in NSW.
Wait times for results have also blown out, with the usual 24 hour turnaround blowing out to five days in some cases.
The premier said only those who are unwell or contacted by NSW Health should present for testing, to help alleviate pressure on clinics, many of which have reduced operating hours over the festive period.
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