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NSW has recorded 18,278 COVID cases and two deaths as the state's COVID-19 outbreak continues to spread.

There are 1,066 people hospitalised with Coronavirus  and there are 83 patients in intensive care.

Testing numbers to 8pm on the first day of 2022 were down to 90,019, a drop from 119,278 on New Year's Eve.

The daily case number is also lower than Saturday's 22,577 infections when four deaths were recorded.

3,740 are from South Western Sydney Local Health District.

1,342 are from Hunter New England.

123 are Covid infections have been reported today from Southern NSW.

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Chief Health Officer Kerry Chant warned earlier in the week there were probably more cases than health authorities knew about as testing systems remain back-logged by a huge demand for tests in the lead-up to Christmas.

Some 93.6 per cent of adult NSW residents have now had two doses of a COVID-19 vaccine.

The 12 to15-year-old age bracket has moved to 78.2 per cent having received two doses.

Image: NSW Health