The state's death toll now sits at 921, an increase of 165 in a week.
Some 29,830 positive tests were reported in the 24 hours to 8pm on Monday, including 13,763 from self-reported rapid antigen tests.
Hospitalisations have increased 30 per cent in a week to 2850, with 209 COVID-19 patients in intensive care.
About 26.5 per cent of people aged over 16 have had a booster shot, but the first-dose rate remained stable at 95.2 per cent
About six in seven children aged five to 11 are yet to receive a dose of the COVID-19 vaccine - a fortnight out from the start of term one.
Tuesday's figures come as the NSW premier conceded the health system was under pressure but assured the public the state was on the "hard but right" road.
"We have to get on with life," he told the ABC on Tuesday.
"If we decide to continue the approach where we had a highly unvaccinated (sic) population and go into lockdown, that would have substantial consequences for men and women right across the state in terms of being able to provide food on the table for their family."
Some supermarket shelves are also bare due to supply chain issues while businesses are being forced to close due to the vast number of staff isolating.
However "these are issues we will overcome," the premier said, putting hospital pressure down to "just the course of the pandemic".
While the spread of Omicron was faster than expected, he said the health system was tracking better than the best-case scenario in modelling published earlier this month.
That scenario predicted hospitalisations would peak at 3158 people with 270 in ICU.
On Monday, a senior Sydney doctor warned health care workers are exhausted as thousands of patients are admitted each day.
"Our capacity to manage everything else has ... really changed," said lung specialist Lucy Morgan, who works at Nepean and Concord Hospitals.
"In the short term, that's OK. But in the long term, and (the pandemic has lasted) two years now, this is bad."
With the Omicron variant spreading rapidly through the community, health workers are being exposed and left unable to work.
About 6000 health workers were isolating after being exposed to the virus, Dr Morgan said.
She urged NSW residents to get a booster shot to protect themselves against Omicron and alleviate the burden on the health system.
Meanwhile, the first 1.2 million rapid, at-home tests ordered by the NSW government have arrived, with another 15 million expected within a week.
The government's order of 50 million will be distributed to schools, social housing, vulnerable and remote communities.
The Sydney Morning Herald reports the state's 1.2 million students would need to take RATs twice a week under one proposal for the return to school.
Parents may also be asked to supervise children in classrooms to counter staff shortages and prevent a return to homeschooling.
The NSW-Victorian plan will be presented to national cabinet later this week.
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