Indoor mask wearing will again be compulsory in NSW after Premier Dominic Perrottet backflipped on several restrictions, in an attempt to suppress a spike in coronavirus cases.
The state recorded 5715 cases on Thursday, just 10 shy of the nation's total for Wednesday.
Hours later, Mr Perrottet said mask rules for indoor settings would return from 12.01am on Christmas Eve.
Pubs, restaurants and other hospitality venues will move to a two-square metre rule from December 27, when QR check-ins will also again become compulsory in hospitality and retail.
"We believe the changes ... will ensure that our health system is well manned over the holiday season as we go through this next stage," the premier said.
"Our number one priority is to keep people safe.
"We continue to open up the economy safely and are incredibly confident that NSW and our great people have made enormous efforts and sacrifices over this period of time."
Restrictions will remain in place until at least January 27.
Despite the rapid rise in cases, current health advice suggested the Omicron variant was about five times less severe than Delta, Mr Perrottet said.
Addressing the strain on PCR testing clinics, he said the government would investigate how to provide rapid antigen tests to the general population.
But free kits won't be available until an unknown date in 2022 - providing little comfort for those currently unable to find or afford the coveted tests that retail for about $15 each.
Since lifting most restrictions on December 15, the premier had struck a confident note and urged residents to take "personal responsibility" and help lead the nation out of the pandemic.
Instead, NSW led the nation in cases - more than 23,700 have tested positive in the past week, including 16,800 people aged between 10 and 39.
Testing clinics and labs have also been overwhelmed.
The time between a sample being taken and labs telling NSW Health it is positive was under 24 hours in only half of cases last week.
Meanwhile, the number of healthcare workers in isolation has tripled - from 459 to 1500 - in nine days.
Casting the reintroduced restrictions as sensible, modest and precautionary, Health Minister Brad Hazzard asked people to reduce the risk by hosting any visitors outside.
"If you can't do that, open all the windows," he said.
Dr Kerry Chant apologised for discouraging fun activities such as singing and dancing, known to increase the risk of transmission.
"Please take those activities outdoors, with lots of social distancing," the NSW chief health officer said.
She said the new QR code regime would be less stringent than before December 15.
Retail was a lower risk setting when people wore masks and socially distanced, she said, meaning contact alerts would act as a prompt, rather than a direction to isolate.
"NSW Health will only be contacting and focusing our efforts on people that have entered or worked in high-risk settings," Dr Chant said.
Royal Australasian College of Physicians president-elect Jacqueline Small expressed relief NSW had moved in line with medical experts.
Meanwhile, Opposition Leader Chris Minns said NSW should pull "whatever levers we can ... to get this pandemic under control, short of a lockdown".
In the past three days, one in 275 people living in Newcastle and its surrounds and one in 500 people in Sydney's inner west, east and southern suburbs have tested positive.
In that time, the number of people in hospital has climbed 86 to 347.
Most of the 45 currently in intensive care are unvaccinated.
"It's really sad to see some very young people in ICU who are not vaccinated," Dr Chant said.
© AAP 2021