The variant is what's known as recombinant, meaning it is a mixture of the two different strains and has characteristics of both.
More than a thousand cases of XE have been recorded in the UK and cases have also been detected in Thailand, India and Israel.
Its presence around the world suggests it has been spread by open borders and international travel.
From Monday, international arrivals will no longer need to test negative to Covid-19 before leaving for Australia, meaning more cases of new variants could arrive in the country.
"As the Covid pandemic has progressed, we've repeatedly seen the arrival of new viral variants," University of Leeds virologist Dr Grace Roberts wrote in The Conversation.
While the properties of XE are not yet well known, Roberts said there did not appear to be cause for additional concern.
"We know that omicron XE has the majority of its genetic information, including the spike protein, from the omicron sub-variant BA.2, which is the variant predominating in the UK at the moment," she said.
"It is likely, therefore, that the characteristics of omicron XE (such as transmissibility, severity of disease and vaccine efficacy) are similar to those of BA.2."
NSW recorded 17,856 positive cases of Covid on Thursday, with a total 1582 Covid cases admitted to hospital, including 71 people in intensive care, 23 of whom require ventilation.
The state also recorded 21 Covid-linked deaths on Thursday, including one person who was over 100-year-old.
Of those that died, three people were not vaccinated.
