New South Wales recorded 1284 new Covid-19 cases in the 24 hours to 8pm yesterday.
There were 12 fatalities in the reporting period. Premier Gladys Berejiklian said the state was "inching closer and closer" to the 70 per cent double dose rate.
She said half of people in NSW aged over 16 were now fully vaccinated.
NSW will trial home quarantine for returning Australians who are fully vaccinated "in the next couple of weeks", the Premier said.
The pilot, to be operated and monitored by NSW Health and NSW Police, will trial a seven-day home quarantine program for around 175 people.
Currently, people coming to NSW from overseas must quarantine in a hotel for 14 days.
Participants in the pilot, which will be run in partnership with the Commonwealth, must have had both doses of a TGA-accredited Covid-19 vaccine.
The participants will be selected by NSW Health, based on a risk assessment framework, and may include some NSW residents, some non-Australian residents and some Qantas air crew.
NSW Tourism Minister Stuart Ayres described the trial as "an important step" in the state's roadmap to living with Covid-19.
"We can't stay closed forever. We've got to be able to learn what happens when we put people in home-based quarantine," Ayres said.
"Sydney is a global city and it must engage with the globe."
He said the trial would also help with Australian citizens who have been unable to return home during the pandemic.
"This is a really big step and a light for every Australian who are still overseas because of caps, and haven't been able to come home," he said.
"We want to be able to lift those caps and do that as soon as possible but we want to be able to make sure we do so in a very safe way."
Two of the 12 people who died in the reporting period were in their 20s.
One was from Western Sydney and had one dose of a Covid-19 vaccine.
She died at Nepean Hospital and deputy chief health officer Marianne Gale said she had underlying health condition.
The other was a resident at the Life Without Barriers group home in Wyong, on the Central Coast, and acquired her infection there.
She was unvaccinated. Three of the deaths were residents of aged care facilities in Dubbo, in the state's west.
Three people in their 50s died, and the others were aged in their 60s ,70s, 80s and 90s.
Seven of the 12 people who died were not vaccinated, two had had one dose and three were fully inoculated.