The Illawarra Shoalhaven region has recorded 821 new COVID-19 cases in the latest reporting period.
It is a jump of 577 cases since yesterday.
Authorities said 498 cases were from Wollongong, 175 from the Shoalhaven, 108 from Shellharbour and 40 from Kiama.
Despite the sharp increase in numbers, hospitalisations remain low with 14 people in hospital with the virus.
Wollongong Lord Mayor Gordon Bradbury has urged people planning New Year's Eve celebrations to take precautions while still enjoying themselves.
"We need to be cautious around large groups and wear masks," Cr Bradbury said.
"At the same time, we don't want to miss out on life.
"We've just got to approach it in a different style while we are confronting this particular situation with the virus."
Businesses welcome 'close contact' changes
Shoalhaven Business Chamber president Jemma Tribe says changes to the definition of "close contact" agreed by national cabinet yesterday were a welcome move.
She said many businesses in the Shoalhaven had been struggling to open, with staff required to isolate, particularly as case numbers rose.
"In busy hospitality and tourism sectors, anything that can get staff back to work quicker and in a safer way will be welcomed by the business community," Ms Tribe said.
Executive Director of Business Illawarra Adam Zarth also welcomed the changes, but said they would only work if rapid antigen tests were more readily available for businesses.
"Supply chain issues are dogging us yet again," Mr Zarth said.
"And of course it is making it difficult for us to access the tests we need for our staff and the workforce to participate in these slightly relaxed rules."
The isolation requirements are also affecting other sectors, including beach lifeguards.
Kendalls Beach in Kiama was unpatrolled yesterday, due to lifeguards forced into isolation.
More than 95 percent of people across the region are double vaccinated.
