The new rules were announced by Premier Gladys Berejiklian and will come into force from 12.01 on Monday.
Here's a rundown of what is changing across the state.
Greater Sydney's lockdown will be in place until the end of September, at least.
The premier says Shellharbour and the Central Coast will be removed from the Greater Sydney definition to become rural areas.
The lockdown in rural and regional NSW is due to end on August 28 but that could be extended depending on case numbers.
A decision on that will come next week, the premier said.
New mask rules for all of NSW
Everyone across NSW must wear a mask outside of their homes, except for when exercising.
The rule comes into force at 12.01am on Monday August 23.
For those exercising, a mask must be carried at all times.
The rule will be in place for rural and regional NSW until August 28, at least.
READ MORE: Coronavirus spreads to regional Victoria
Curfew in place for hotspot LGAs
A curfew is being introduced across 12 local government areas in Greater Sydney where coronavirus cases are at their highest.
Those LGAs are Bayside, Blacktown, Burwood, Campbelltown, Canterbury-Bankstown, Cumberland, Fairfield, Georges River, Liverpool, Parramatta, Strathfield, and some suburbs of Penrith.
People will not be allowed to leave their homes between 9pm and 5am.
That curfew will come into place at 12.01am on Monday.
The curfew will not apply for authorised workers, emergencies or medical care.
Exercise limited to one hour
People living in hotspot areas – spread across Sydney's south-west and western suburbs – will be limited to exercising outdoors for just one hour per day.
Ms Berejiklian said this move was made as a small group of people were using exercise the wrong way in a bid to leave the home.
More retail venues to close
A number of additional retailers will move to click and collect only, from Monday.
They include garden centres and plant nurseries, office supplies, hardware and building supplies, landscaping material supplies, rural supplies, and pet supplies.
Tradespeople are allowed to shop in-store where relevant.
These rules will apply for residents and businesses in the LGAs of concern.
New rules for authorised workers and workplaces in hotspots
From Monday, workers from the Canterbury-Bankstown, Cumberland and Fairfield LGAs will no longer have to have been tested for COVID-19 19 in the previous 72 hours to work outside their LGA.
Childcare workers and disability support workers who live or work in the LGAs of concern must have their first vaccination dose by August 30.
Authorised workers who work outside their LGA of concern are only permitted to work if rapid antigen testing is implemented at their work-site or they have had their first vaccination dose by August 30.
From Saturday August 28, authorised workers from the LGAs of concern are required to carry a permit from Service NSW declaring that they are an authorised worker and cannot work from home.
Also from August 28, anyone entering an LGA of concern for the purposes of work must carry a worker permit issued by Service NSW.
Police given new 'special' powers
Police will be able to lock down apartment blocks while health assesses the COVID-19 risk.
A residential premise can be deemed a COVID-risk premise, with all people required to be present to police during compliance checks.
Police will be able to direct a person who has been issued with an infringement notice to return to their place of residence.
If a person from outside an LGA of concern is found to be in an LGA of concern without a reasonable excuse, they will be fined $1000 and required to isolate at home for 14 days.
Parents urged to keep children at home
Ms Berejiklian has pleaded with parents and carers to keep children at home and not take them to childcare centres and schools.
"We are also encouraging that unless you have to, please do not send your children to childcare or early childhood," said Ms Berejiklian.
It comes after a number of positive infections at schools and childcare centres,
More information on the new rules can be found here.