NSW has reported 248 new Covid-19 infections and two new deaths on Wednesday.
There are 195 people in hospital with 35 in intensive care.
Across the state 94.4 per cent of the population aged over 16 have received their first dose of the vaccine, while 92 per cent are double vaccinated.
For those between the ages of 12 and 15, 81 per cent have had one dose, while 75.7 per cent are fully vaccinated.
In the 24 hours to 8pm on Tuesday, 80,317 tests were conducted, up from 52,302 recorded the previous day.
NSW will next ease restrictions when the state reaches 95 per cent double vaccinated or on December 15, 2021, whichever comes first.
That is also the date when unvaccinated people will be allowed to enjoy the same freedoms as the rest of society, including attending non-essential retail and hospitality venues.
Health officials are reportedly pushing for masks to remain mandatory even after NSW hits hits the 95 per cent vaccination target amid fears infections will spike over the holiday period.
NSW has one of the highest vaccination rates in the country, but some are worried Covid-19 could spread in retail settings over Christmas.
Under the current rules, masks must be worn in common areas of apartment buildings, supermarkets and retail stores.
But it is believed they are set to be removed when unvaccinated residents are given the same freedoms as the inoculated on December 15.
However, some NSW Health officials are pushing to keep masks mandatory for even longer, according to The Daily Telegraph.
Health Minister Brad Hazzard said the concerns from health officials were “understandable”.
“At times like the mad retail rush we’ll see at Black Friday and Christmas it becomes pretty clear why Health will be likely to have continuing concerns,” he said.
Premier Dominic Perrottet is expected to face a divided party room over the issue.
The rule is set to be debated at a meeting of the cabinet’s Covid-19 subcommittee on Thursday.