Premier Gladys Berejiklian said police would be enforcing a 9pm to 5am curfew from Monday in Bayside, Blacktown, Burwood, Campbelltown, Canterbury-Bankstown, Cumberland, Fairfield, Georges River, Liverpool, Parramatta, Strathfield, and some suburbs of Penrith.
The only people allowed to leave their homes during these hours will be authorised workers.
"We feel for you, we've imposed a lot of restrictions on you already ... But we don't want to see more of you lose loved ones," Berejiklian said.
"It's heartbreaking when you see a disease rip through families. Families who aren't vaccinated are suffering the most.
"I apologise deeply to the vast majority of people in these communities who are doing the right thing, but for our own health and safety moving forward we need to make these difficult decisions."
NSW Commissioner Mick Fuller said police had asked for additional powers.
"These additional powers, including the curfew are, from a police perspective, about stopping the spread of the virus," he said.
In addition to the curfew, outdoor exercise will be limited to one hour a day.
From Monday, all NSW residents will also be required to wear masks outdoors unless they are doing strenuous exercise.
"Our concern is that when people are walking past a group of people or accidentally bumping into people that, that can cause that fleeting contact can cause transmission, and even when you're exercising, you need to have the mask unless you're doing some strenuous exercise," Berejiklian said.
"And if you happen to come into contact with anybody else [while doing strenuous exercise], the mask needs to be put on your face."
Victoria
Victoria has recorded 55 locally acquired Covid-19 cases overnight.
Twenty-five have been in isolation for their entire infectious period, and 49 are linked to known outbreaks.
That means at least six are mystery cases.
Victorian authorities will release full case, testing and vaccination numbers shortly.
Queensland
Queensland today recorded no new locally acquired Covid-19 infections and one historical case - a child who tested negative four times while in isolation.
The child is a student under the age of 10 at Ironside State School.
Despite the child's parents testing positive during their 14 days of home quarantine, the child never returned a positive test.
Queensland's chief health officer Jeannette Young said serology testing revealed the child had indeed had Covid and fully recovered, despite the four earlier negative results.
"We know that happens with young people," she said.
"But this [case] is of no risk because they were in quarantine the entire time. They have now fully recovered so they can leave quarantine.
"Other than that, we have no new cases, which is excellent news and it means we can remove some restrictions at 4pm."
This afternoon, a suite of restrictions will be eased in Queensland, with masks no longer required outdoors.
