Greater Sydney, the Blue Mountains, Wollongong and the Central Coast are being placed into lockdown.
It comes after New South Wales officials announced earlier on Saturday 12 new locally acquired COVID-19 cases. That does not include any cases detected since 8pm on Friday night.
A total of 29 community cases were recorded in the 24 hours to 8pm on Friday, 17 of which had already been announced on Friday morning, health officials said on Saturday.
The latest cases come as Sydney entered a partial lockdown on Saturday, with residents of four local government areas (LGAs) - Woolhara, Waverley, Randwick and the City of Sydney - given stay-at-home orders.
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NSW Premier Gladys Berejiklian said the situation in the state was "evolving" and signaled a further lockdown was likely.
She announced that later in the day, putting Greater Sydney, the Blue Mountains, Wollongong and the Central Coast into lockdown from 6pm (local time). The lockdown will last until at least the night of July 9.
"This variant of the virus is contagious and transmissible like no other variant that we've seen, and that is why the New South Wales Government will take any necessary action it needs to take," Berejiklian told media.
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Berejiklian said it was concerning the 12 new cases announced today could not be linked to the LGAs already in lockdown.
NSW Health Minister Brad Hazzard told reporters there was a "growing and more intense concern" among health authorities due to the fact the outbreak was linked to the Delta variant.
"The Delta variant is proving to be a very formidable foe – no matter what defensive steps we're taking at the moment, the virus seems to understand how to counter-attack in different locations. That's causing us a high level of concern."
The outbreak has led to the trans-Tasman travel bubble between New South Wales and New Zealand being put on pause.
The bubble was initially halted for 72 hours before being extended for a further 12 days.
On Friday, COVID-19 Response Minister Chris Hipkins said the New Zealand Government was working on "contingency plans" for Kiwis stuck in Sydney.
"We will work now over that 12-day period to prepare contingency plans so that should we not be in a position to remove the travel pause at that point, we will have alternative arrangements in place, which is the work that we did around Victoria," he told Stuff.
