The changes to isolation requirements are in line with those for the general community, which changed on Friday night to no longer require people to isolate for seven days if they're a household or close contact of someone who has tested positive for coronavirus.
The changes will help ensure continuity in the state's schools and prevent disruption in teaching and learning, Education Minister Sarah Mitchell said.
"School is where our students learn best and we need to do everything we can to make sure that face to face learning continues with minimal disruption as we move into the colder months," Ms Mitchell said.
Teachers and students will be required to inform their schools of their close contact status.
They will have to take a rapid antigen test daily before attending and must wear a face mask indoors, with the exception of primary school students for whom face masks are only a strong recommendation.
More rapid antigen tests are expected to be distributed to parents and school staff early on in the term.
Retired teachers and those in their final year of study will also be on standby to cover gaps.
The return of students and teachers to classrooms was a primary focus for the NSW government as term one approached, with testing protocols and other requirements to reduce the spread of the virus in place.
More than 600 school staff and 2400 students tested positive in the first week.
NSW also announced this week changes to vaccine mandates for workers in some sectors and industries including teachers.
Aged care and disability staff will still require vaccination, but other areas will shift to mandates based on the assessed risk of the role.
That could mean vaccine mandates for workers such as teachers and police are adjusted, however, a spokesperson for Ms Mitchell told AAP the public health orders covering teachers are current until mid-May.
Students and teachers return for term two on Tuesday.
Schools will continue maximising fresh air and ventilation in a bid to keep virus transmission down, leaving windows and doors open where practical, Ms Mitchell said.
There has also been additional work done to equip schools in the lead up to winter with air purifiers being provided for colder climate schools, improvements to ventilation and testing of air conditioning and heating.
If a school-wide outbreak is detected then those schools are required to cease large indoor gatherings and off-site and inter-school activities, separate students, limit visitors and potentially shift back to learning from home.
