Premier Gladys Berejiklian on Sunday said all seven cases were linked to the Northern Beaches, and six had been linked to the Avalon cluster which now involves about 122 cases.
The other new locally-acquired case - involving a firefighter from the Northern Beaches with links to the Belrose Hotel - is still under investigation.
Ms Berejiklian said more details of New Year's Eve festivities in Sydney would be announced on Monday and Tuesday.
Victoria marked 58 straight days with zero community transmission cases on Sunday, recording just one new coronavirus case in a returned international traveller.
Positive COVID-19 test forces Royal Melbourne Hospital staff into isolation, later shown to be a false positive
At the same time a positive COVID-19 result from a female patient at the Royal Melbourne Hospital prompted immediate action on Saturday.
As many as 30 staff at the Royal Melbourne Hospital have come out of self-isolation after an initial positive COVID-19 test result was shown to be a false positive.
The Department of Health and Human Services says the initial low positive test result for the female patient was reviewed by the Expert Review Panel.
