Masks will be scrapped in almost all settings across NSW while QR code check-ins are also set to be dumped as part of huge changes to the state's Covid rules.
Premier Dominic Perrottet made the announcement on Thursday with the changes to come into effect from Friday.
QR codes will be scrapped from all retail and hospitality except for nightclubs and large music festivals.
Density limits will be dumped and the state's work-from-home direction will also end.
The singing and dancing ban will also be lifted.
Hotel quarantine isolation requirements for unvaccinated travellers will be shortened to seven days from Monday, February 21.
From February 25, a new suite of changes will come into effect including masks only being required on public transport, airports and hospitals.
Singing and dancing will be permitted at music festivals and the 20,000-person cap on music festivals is set to go.
However, revellers attending a music event with more than 1000 patrons will need to be fully vaccinated.
Perrottet said a plummeting number of infected people in hospital was the reason behind the changes.
"There are very pleasing signs now in hospitals at the moment right across our state. And so as a result we are lifting a range of restrictions," he said.
"From time to time, we will see cases increase ... This is the new reality."
NSW chief health officer Dr Kerry Chant said people should "change their horizon of thought" about what the pandemic's next phase will look like.
"Omicron may be the dominant strain but we will need to plan and prepare for the emergence of new variants," she said.
"Even in the case of no new variants emerging, we can expect further waves."
It comes after the state recorded 9995 new cases of Covid-19 and 14 deaths on Thursday as the state moves closer to relaxing restrictions.
The update from NSW Health is a slight drop in infections after the state recorded 10,463 cases on Wednesday and 8201 on Tuesday.
Hospitalisations are continuing to fall with 1447 patients now in hospital, including 92 in ICU.
On Wednesday there were 1478 people in hospital. The number of people in ICU remains the same.
Of Thursday's new cases, 5747 results were from rapid antigen tests and 4248 were the result of PCR tests.
Across the state, 94.2 per cent of people aged over 16 have had two doses of the Covid-19 vaccine, and 49.7 per cent are triple vaccinated.
Meanwhile, 83.5 per cent of children aged 12 to 15 have had one dose of a vaccine and 78.9 per cent are fully vaccinated.
Of children aged 5 to 11, 46 per cent have received a Covid-19 jab.
The current Covid-19 restrictions across the state are set to end on February 28, including mandatory QR check-in requirements for pubs, clubs and bars.
The rules also include indoor mask mandates, density limits and a ban on singing and dancing.
Check-in rules at venues such as supermarkets, offices and retail shops are also due to expire come February 28.