The quake struck at 2.55am on Wednesday near Singleton in the NSW Hunter Valley about 200km north of Sydney, Geoscience Australia seismologists said.
Its magnitude was initially read at 5.1 and later revised to 4.6.
No injuries have been reported as a result of the tremor.
The NSW State Emergency Service received several phone calls from concerned residents but only reported responding to one incident.
That was at a Rutherford property near Maitland that required sandbags for a burst water pipe shortly after 3am.
The tremor was felt between Port Macquarie and Wollongong, Geoscience Australia senior seismologist Phil Cummins said.
Sydneysiders are among more than 3500 people who reported feeling the earthquake by 7.45am, according to Geoscience Australia's website.
"It's been widely felt ... some of (the reports) were moderate and strong shaking," Professor Cummins said.
Hunter MP Dan Repacholi was woken by the tremor and said his team was on the ground to help with any damage.
"Well that was a bit of a rude awakening ... (I) reckon most of the Hunter would've felt that shake," he wrote on Facebook.
One Newcastle resident said the shaking frightened her to the point she thought someone was trying to break into her house.
"My bed lifted off the floor and the wardrobe doors were rattling ... at least I didn't imagine it," she wrote on Facebook.
Preliminary information indicated the quake occurred at a shallow depth of 10km.
The Joint Australian Tsunami Warning Centre said the quake posed no tsunami threat to the Australian mainland, islands or territories.
But Prof Cummins said aftershocks were expected.
"They'll probably be smaller, but some of them may be felt, and that may continue for a few days or even a week or more," he said.