A flood warning was issued on Thursday for low-lying residents in Wagga Wagga and Tumut, in the state's south.
"They're expecting major flooding of the Tumut River in the next few hours," State Emergency Service (SES) spokesman Andrew Richards told AAP.
"We've got it on alert."
People living in 340 properties in the outer western Sydney enclaves of Pitt Town, Gronos Point and Lower Richmond are also on alert as the Hawkesbury threatens to burst its banks.
Near Canberra, 400 people in Queanbeyan are also preparing to evacuate if necessary, along with 16 residents on the south coast living near the Jerrara Dam.
Sydney's Warragamba Dam - which reached 95 per cent capacity on Thursday night - is expected to spill on Friday morning for the first time in 14 years, with the weather bureau predicting increased rainfall in the catchment area into Friday.
Western Sydney looks set to escape with just moderate flooding, despite 75 per cent of NSW being either under water or threatened by floodwaters as the state buckles under its heaviest rains since the 1920s.
When the dam spills the water will flood into the already swollen Murrumbidgee, Hawkesbury and Nepean rivers.
Locals have been advised to keep children home from school on Friday to avoid problems associated with what is likely to be moderate flooding in the Nepean Hawkesbury Valley.
SES incident controller for western Sydney Keith Fitzgerald said it was highly likely this flooding would result in the closure of the bridges at Windsor and North Richmond.
"People should think seriously about keeping their children home from school and about changing their normal pattern of commuting," Mr Fitzgerald told reporters on Thursday.
He also warned residents against complacency, saying flood-threatened residents in western Sydney could put themselves and their families at risk if they failed to heed warnings.
"The main concern I have here in Sydney is complacency," Mr Fitzgerald said.
"Folk will continue to try to go about their day-to-day business and in doing so put their families and themselves at risk."
Since the rains began, the SES has carried out 13 flood rescues, including three on Thursday, one of which involved a family and their seven dogs near Coolamon in the Riverina.
- AAP
