Some 420 people were diagnosed with the virus on Wednesday, including eight cases of the new variant of concern, the biggest tally since October 13.
Health authorities are concerned case numbers will continue to surge thanks to transmission at festive season celebrations.
A trivia night at a Sydney pub has sparked a new cluster of cases, with 44 patrons testing positive to the virus after attending the popular Oxford Tavern in Petersham on November 30.
Authorities are also concerned about 140 passengers who embarked on a Sydney Harbour cruise on Friday night which has so far resulted in five cases of the Omicron variant.
More infections are expected, NSW Health Deputy Chief Health Officer Marianne Gale said.
People who attended either venue are close contacts and must abide by testing and isolation rules.
A notorious Bondi backpackers hostel was placed in lockdown and cordoned off by police on Thursday afternoon at the request of NSW Health.
Noah's Backpackers faced scrutiny early in the pandemic after guests were seen crowding together and largely ignoring physical distancing guidelines.
On Thursday afternoon NSW Health called police to assist in locking down the venue.
NSW Health has also issued an alert for a nightclub at Byron Bay, where thousands of teenagers are celebrating schoolies.
Anyone who was at Woody's Surf Shack Night Club on November 30, December 1, December 2 and December 3, between 8pm and 3.30am is being contacted.
More high-transmission events in the coming weeks are likely, Dr Gale said.
"As Christmas approaches, and more of us gather with families, friends and colleagues to celebrate, it is particularly important to be vigilant," she said.
Gatherings should be held outdoors wherever possible, she said, and people with even mild symptoms should not attend or have visitors.
But Premier Dominic Perrottet is urging "confidence, hope and optimism" ahead of the end of most restrictions next week.
From December 15 density limits will be scrapped, QR check-ins will only be required at high-risk venues, and masks will only have to be worn on public transport, at airports and on planes.
The relaxation comes after the UK has again implemented tough restrictions only months after easing them for the northern summer.
Mr Perrottet said NSW is not on the same path.
"We will always adjust our settings for the circumstances we find ourselves in, because it's very clear that we are in a much stronger position in NSW because of our vaccination," Mr Perrottet said.
NSW now has 93 per cent of adults fully vaccinated - just two per cent short of the goal nominated by Chief Health Officer Kerry Chant.
More than 77 per cent of the state's young people aged 12-15 are fully vaccinated.
Mr Perrottet said people should not to be phased by climbing case numbers or events abroad, but instead should focus on the numbers hospitalised with the virus in NSW, which has remained mostly steady.
There are 151 people in hospital with COVID-19, 25 of them in ICU and eight ventilated.
No Omicron cases have been admitted to hospital.
One death was reported on Thursday, a fully vaccinated man in his 70s with underlying health conditions from Lake Macquarie who died at Gosford Hospital.
