NSW will undertake a "comprehensive shutdown" of non-essential services as the number of coronavirus cases in the state rises past 500.
Premier Gladys Berejiklian says supermarkets, petrol stations and pharmacies are among the businesses that will stay open.
Schools will remain open on Monday, although the premier is planning to make further announcements on education.
"Tonight I will be informing the National Cabinet that NSW will proceed to a more comprehensive shutdown of non-essential services," Ms Berejiklian said on Sunday in a statement.
"This will take place over the next 48 hours."
The announcement was made as NSW Health on Sunday confirmed 97 new COVID-19 cases, bringing the state's tally to 533. Of those 533 cases, 46 have been contracted locally without an identified source of infection.
Victoria is also expected to take similar action to NSW if the national cabinet, which includes Prime Minister Scott Morrison and state and territory leaders, doesn't agree at its meeting on Sunday evening.
Mr Morrison has resisted closing schools based on medical advice.
Australian Associated Press