reported 21,030 new Covid-19 cases and 29 deaths on Wednesday - though the numbers of patients with serious symptoms in ICU has dropped from 183 to 175.
There appears to be a similar trend further south with Victoria's Covid ICU numbers falling from 119 to 113 as the state reported 13,507 cases and 35 deaths on Wednesday.
NSW is expected to reach its one millionth case of the pandemic, two years after the first cases were recorded in Australia.
Half of those cases were added in the last two weeks and more than 90 per cent in the last two months of the wave 's ferocious spread after returning international travellers unknowingly brought the variant into the country.
On Tuesday, Mr Perrottet announced reintroduced restrictions for mask use, hospitality density limits and bans on singing and dancing, due to end on Thursday, would be extended until the end of February in a bid to suppress the spread of Omicron as children return to classrooms.
NSW Premier Dominic Perrottet (pictured) has assured residents hospitality and retail venues are safe to visit amid the Omicron wave
Mr Perrottet said extending restrictions to February 28 was 'the right approach' as it would suppress the spread of Omicron ahead of increased movement once schools return next week.
'It's better to have the two-square-metre rule than no square-metre rules and not having the confidence in the community to go out to restaurants and bars,' Mr Perrottet said.
Under the continuing restrictions, hospitality venues including pubs, nightclubs and cafes will keep an indoor density limit.
As NSW welcomed Australia Day 2022 the state is expected to report its one millionth Covid-19 case (pictured: the Sydney Opera House on Wednesday morning lit up with Indigenous art)
Masks are required in all indoor settings except homes and QR code check-ins are compulsory at certain premises, including hospitality venues and shops.
The Premier said the decision would reassure the public that bars, cafes and retail were safe to visit.
'I believe the maintenance of these measures ...will actually drive economic activity, not impede it,' he said.
Singing and dancing also remain banned in hospitality and entertainment venues except for performers.
Hospitalisations in NSW and Victoria appear to be reducing amid Omicron (pictured: a Melbourne paramedic)
Mr Perrottet has promised that businesses reeling from the effects of the Omicron wave will get fresh support within a week.
And added his priority was returning children to classrooms next week and resuming non-urgent elective surgery in mid-February.
In Victoria, Premier Daniel Andrews announced a similar strategy, terbaik sumatera saying 6.6 million RATs will be delivered to schools and early childhood centres across the state before primary and secondary students resume classes on January 31.
However, pharmacists have warned RAT availability will become stretched after two tests are issued to staff and students across 3000 primary and secondary schools.
Victoria remains un-locked down as tens of thousands of residents visit the Australian Open (pictured: Flinders Street station)
There seems to be agreement between experts that many Australian states have passed their peak as daily Covid infections drop without having to lock down.
NSW chief health officer Dr Kerry Chant said the Omicron outbreak was 'stabilising' and it's now time for people to learn to live with the virus.
'I think we need to have a sense of optimism, I'm incredibly optimistic,' she told reporters on Monday.
'It is pleasing that when we look at a range of measures, our assessment indicates that the spread of coronavirus is slowing, our situation is stabilising.'
But the EU has left Australia off a 'white list' of countries which are able to travel to the region amid surging cases - so Australian tourists could be banned from Europe or forced into quarantine in some areas.
'New testing and self-isolation requirements may apply depending on which EU member state you're travelling to, regardless of whether you're considered fully vaccinated or not,' the EU said in a statement.
The European Union on Monday declared Down Under a 'Covid danger zone' amid surging Omicron cases (pictured, a man is tested at Sydney International Airport)