What you need to know about NSW's renewed COVID-19 restrictions

New COVID-19 restrictions have come into force in New South Wales as health authorities try to control a rapidly spreading outbreak driven by the Omicron variant.

Reduced numbers of people in venues such as pubs, and QR code check-ins returning are among the changes that took effect at midnight, following the return of an indoor mask mandate from Christmas Eve.

Announcing the suite of restrictions, which are expected to last until January 27, on Thursday, Premier Dominic described them as "modest, cautious and precautionary".

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Density limits return

From December 27 to January 27, density limits are back in indoor hospitality venues.

This is the two-square-metre rule, with people urged to not "mingle" at pubs, clubs and cafes.

"We know that from a case we've seen in Newcastle that singing and dancing and the like has been part of that increase in spread," Mr Perrottet said.

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Working from home

People are encouraged to work from home if at all possible, particularly during the holiday period.

This is not a mandate, but Mr Perrottet said the government wanted to limit mobility, particularly to help support health workers.

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QR codes to expand

QR code check-ins had remained in place for high-risk venues, but they have now returned to other sites as well.

Retail and lower-risk settings would see QR codes come back on December 27 in a "limited way", Mr Perrottet said.

Chief Health Officer Dr Kerry Chant said it was likely people might have to check in to a shopping precinct, but not individual stores.

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Free at-home testing

Mr Perrottet said the government was working towards providing free rapid antigen testing for people next year.

"We see this as crucial as we move through this next part of the pandemic," he said.

"We need to move away from PCR testing and make sure we drive personal responsibility."

There were no specifics revealed on Thursday but RATs remain available from grocery stores and pharmacies.

Warning on testing

With long queues overwhelming testing clinics, Premier Dominic Perrottet on Boxing Day urged residents to consider using a rapid antigen test (RAT) if they weren't legally or medically required to get a PCR test.

"I know there are long queues right across our state, so if you do not feel unwell there is no need to receive a PCR test. You are taking a spot in the queue from somebody who needs a test," he said.

"We just don't believe that the requirement of a PCR test for somebody who is not unwell is actually supportive of that view.

Masks are back

Masks became a requirement in indoor settings at midnight on Christmas Eve.

Previously, masks were only required on public transport, at airports or on aeroplanes, and for front-of-house hospitality staff who are unvaccinated.

People may remove their mask while eating and drinking.

At this stage, the mandate will extend to January 27.