Sydney's growing COVID-19 cluster will impact school holidays and send Albury MP Justin Clancy into self-imposed isolation.
Residents in seven local government areas including Sydney were subjected to a public health order and told not to travel beyond the LGA, with 16 new cases recorded.
NSW Premier Gladys Berejiklian said she would not restrict movements within those areas but "did not want the virus spreading into our regions".
"At the end of the two-day (parliamentary) sitting, I expect once regional MPs go home they will stay home," she said.
Mr Clancy said he had not been in any exposure sites and would return home.
"We understand returning home is safe to do so, but we'll do so coupled with testing and self-imposed quarantine," he said.
"The Sydney community is already very much heeding the warnings ... there has been a swift uptake of wearing masks indoors.
"I hope this proportionate response has the desired outcome."
The cluster in Sydney, which grew to 31 cases, was being "watched closely" by Victorian Acting Premier James Merlino as he announced eased restrictions from midnight tonight.
"We've put the settings in place for a fortnight so Victorians can plan ahead for the school holidays ... but as always, we'll keep assessing the data each and every day," he said.
"For our Alpine resorts, getting tested before you visit will now move to a recommendation for people from metropolitan Melbourne."
Funerals and weddings will be capped at 300 people.
Masks must still be worn inside.
Community sporting venues can have up to 300 people per indoor space and 1000 outdoors, subject to density limits.
"Although the same caps apply statewide in these settings, communities in regional Victoria will be able to use a density of one person per two square metres provided a COVID check-in marshall is present," Mr Merlino said.
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Victoria has listed the seven NSW LGAs as red zones under its travel permit system while South Australia moved to shut its border after opening it to Victorians.
A stricter lockdown was not imposed in NSW because authorities "know where the virus is circulating", Ms Berejiklian said.
"We've always said we won't burden our citizens unless we absolutely have to," she said.
