O'Connell was unable to match the heroics of fellow Sydneysider Alexei Popyrin, bowing out with a 6-1 6-4 6-2 third-round defeat to Sinner on Saturday.
After needing four sets to get through his opener, Sinner has dropped just 13 games in his past two matches, at an average of only two a set.
The Australian Open champion was particularly clinical on serve, crunching down 15 aces, not offering up a single break point for the entire match and winning 82 per cent of points after landing his first delivery.
Jannik Sinner was clinical in a comprehensive win over Chris O'Connell. (AP PHOTO)
"Day by day I feel like my level has been better, so happy about that. Let's see what's coming the next round," Sinner said.
The Italian isn't taking anything for granted after the shock eliminations of defending champion Novak Djokovic and third seed Carlos Alcaraz, his two chief threats for the title.
"It shows that this sport is unpredictable," Sinner said.
"Whenever you drop a little bit of your level, if it's mental, if it's tennis-wise or physical, at the end it has a huge impact on the result.
"Both opponents who they lost against, they played some incredible tennis, and it happens.
"So I just watch on my side what I have to do. Then we will see what I can do."
While Sinner next faces American 14th seed Tommy Paul, a four-set winner over Canadian qualifier Gabriel Diallo, for a place in the quarter-finals, O'Connell can console himself with a career-best payday of $US215,000 ($A$315,000) for reaching the last 32.
Australian Chris O'Connell was no match for the world No.1. (AP PHOTO)
Two more Australians are in action on day four, striving to join Popyrin in the second week.
World No.10 Alex de Minaur, even while still playing less than 100 per cent fit in his first tournament back from the hip injury that forced him out of the Wimbledon quarter-finals, is favoured to take out British veteran Dan Evans in his third-round match on Louis Armstrong Stadium.
And after eliminating seventh seed Hubert Hurkacz in round two, Jordan Thompson also has a big opportunity to progress further against Italian world No.30 Matteo Arnaldi.
Popyrin will take on explosive American Frances Tiafoe on Sunday (Monday AEST) for a quarter-final berth after blowing the bottom half of the draw wide open with a stunning 6-4 6-4 2-6 6-4 disposal of Djokovic.
Brit Jack Draper, meanwhile, equalled his best run at a grand slam by ousting Alcaraz's conqueror Botic van De Zandschulp in straight sets.
Draper matched his effort in New York from last year with 6-3 6-4 6-2 third-round victory.
The 25th-seeded Draper will play Thomas Machac for a quarter-final berth after the Czech crushed Belgian qualifier David Goffin 6-3 6-1 6-2.
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