A motel near Newcastle is in lockdown with scores of guests tested for COVID-19 after a woman staying there tested positive to the virus.
The woman is among 10 new COVID cases in the Hunter Valley region on Friday.
She was staying at a motel about 20 kilometres out of Newcastle with, the ABC understands, about 120 guests.
The motel offers cheap accommodation for people without permanent housing due to a rental crisis in the region.
The Hunter's Public Health controller, Dr David Durrheim, said the woman's case was a concern as guests had been mingling and some had come down with flu-like symptoms.
"She was infectious for a period of time and active in the community and also we know of a lot of mixing in the motel itself," he said.
"There are a number of people who are symptomatic and there is a large-scale operation to make sure everyone is tested and everyone is isolated in place.
"We are working closely with the owners and managers of the motel and NSW Police to make sure we keep the residents and the community safe."
'Already isolated'
Ann Fletcher, from Port Stephens Family and Neighbourhood Services, said she had clients staying at the motel and she was deeply concerned about their physical and emotional wellbeing.
"Certainly, it would be quite a load for them to be carrying what is already quite a heavy load to keep their head above water," she said.
She said she feared things could get worse amid what she said was a "worrying health situation developing".
A statement from the Hunter New England Area Health District said the COVID shutdown was likely to continue for several days.
"It is an evolving situation and the service is meeting daily with an array of government and non-government agencies to see how to support them," a spokesperson said.
"Any confirmed cases will go to a quarantine hotel and the duration of (the motel) lockdown depends on repeat testing.
Alcohol, food and smokes plan
Motel management slid a note under the guests' doors urging them to stay put.
"We wish to stress that you are not allowed to associate with any other guests ... this includes children," the note reads.
"You are not allowed outside your motel room.
Management has been contacted for comment.
Housing officials said NSW Health was the lead agency overseeing the lockdown.
