The number of daily COVID-19 infections in NSW has dipped below a thousand for the first time in almost four weeks but the premier says the "insidious" virus could still bounce back.
However, the Cowra local government area in central west NSW will go back into lockdown on Monday at 5pm after a case was diagnosed in a school boy.
The source of the nine-year-old's infection remains unclear.
NSW reported 935 new local COVID-19 cases in the 24 hours to 8pm on Sunday and four deaths - two people in their 60s and two in their 80s.
It takes the toll for the current NSW outbreak to 245.
The state reported fewer than a thousand cases for the first time since August 27, but Premier Gladys Berejiklian advised NSW residents to remain on high alert.
"Even if case numbers go down, we should expect unfortunately that the number of people in intensive care and the number of people who lose their lives to go up," Ms Berejiklian told reporters on Monday.
"We have had a number of cases in the last few weeks ... people ordinarily get very sick in the second week of the illness.
"I don't want any of us to sit back and think the worst is behind us. Because, unfortunately, too many families are going to have loved ones end up in hospital, or worse."
The number of daily infections of the "insidious" virus could again spike if people ignore lockdown rules and socialise, she said.
NSW modelling suggests COVID-19 case numbers peaked in mid-September but hospitalisations will peak in October - around the time freedoms are restored under the government's roadmap.
There are 1207 COVID-19 patients in NSW hospitals, with 236 in intensive care units and 123 on ventilators.
"Once we start reopening, cases will go through the roof but it won't matter as much because people are vaccinated," Ms Berejiklian said.
Lockdown rules in western Sydney's 12 local government areas "of concern" have now eased for outdoor recreation.
Fully vaccinated adults in the 12 council areas are now free to exercise outdoors with no time limits and gather in groups of five for outdoor recreation within five kilometres from home.
Children under 12 are not included in the group limit.
Conditions for authorised workers and travel permit requirements will remain in place in the LGAs of concern, however.
Public pools can reopen in NSW from September 27.
Ms Berejiklian expressed her hope that all parts of the state could move together and restore freedoms at 70 per cent double-dose vaccination coverage, but said no decisions had been made.
Some 82.23 per cent of NSW residents 16 and over have had at least one vaccine shot, while 52.65 per cent are fully jabbed.
Authorised workers must now be inoculated with at least one COVID-19 vaccine dose to be permitted to leave their LGA for work, unless they have a medical exemption.
NSW reported 13 deaths on Sunday - an outbreak record.
© AAP 2021