NSW residents living in towns near the Victorian border have been warned not to travel to other parts of the state, with the premier flagging further action may be needed to isolate those communities.
Premier Gladys Berejiklian on Wednesday said more than 50,000 exemption permits were issued overnight for people living in NSW-Victoria border communities, allowing them to cross between the two.
But the premier warned the widespread community transmission of COVID-19 in Victoria is a huge risk for NSW and urged residents in Albury and other border towns not to travel to other parts of the state.
"The probability of contagion in NSW given what's happened in Victoria is extremely high," Ms Berejiklian told reporters in Sydney.
"I am extremely concerned about what is happening in Victoria, the extent of community contagion is unlike anything we have seen in Australia."
She said her government will consider either establishing a border north of Albury or making exemption permits more difficult to obtain.
The Berejiklian government is also looking into making hotel quarantine mandatory for NSW residents returning from the southern state.
Currently, NSW residents returning from Victoria must self-isolate at home for 14 days but Ms Berejiklian said forced hotel quarantine - which residents will have to pay for - has not been ruled out.
Ms Berejiklian also flagged some COVID-19 health orders relating to gatherings will be tweaked in the coming days.
NSW on Wednesday recorded eight new COVID-19 cases including seven in hotel quarantine and a woman in her 30s from southwest Sydney. The woman's case remains under investigation.
NSW Health chief health officer Dr Kerry Chant also noted a Victorian teenager holidaying in Merimbula on the southern NSW coast has tested positive to coronavirus.
Dr Chant said the teenager and his family were not from a Melbourne COVID-19 hot spot and were tested for the virus before they left the state.
"They were advised the result was negative and following arrival in NSW they were advised that was an error and that result was positive," she said.
Dr Chant said the family is isolating in Merimbula and the only place they attended was the Tathra Hotel, with all 80 patrons in attendance at the time being contacted by NSW Health.
Queues on the NSW-Victoria border grew to four kilometres overnight as the closure came into force in response to an escalation in new coronavirus cases in the southern state.
There are exemptions in place for essential crossings, including medical care.
NSW Police Commissioner Mick Fuller told reporters some people travelling from hotspot postcodes in metropolitan Melbourne and Mitchell Shire were turned back overnight.
Communities in those areas are preparing for a six-week lockdown from Thursday.
The Australian Industry Group has called on the NSW government to re-open the border with Victoria given the impending lockdown in Melbourne.
"The shutdown of Melbourne overnight leaves the way clear for the immediate reopening of the border between NSW and Victoria," chief executive Innes Willox said in a statement.
Meanwhile, the Berejiklian government has warned businesses they risk fines of up to $55,000 if they don't follow COVID-19 safety guidelines.
Australian Associated Press