The Casino local government area (LGA) in northern New South Wales will go into lockdown at midnight Friday until 11 October.
NSW Health said stay-at-home orders will apply to anyone who has been in the Casino LGA since 24 September.
It comes after NSW reported 864 new locally acquired cases of COVID-19 and 15 deaths, taking the toll for the state's current outbreak beyond 350.
Of the 15 deaths in the 24 hours to 8pm on Thursday, three people were in their 50s, two in their 60s, two in their 70s, six in their 80s and two in their 90s.
Ten of the 15 were not fully vaccinated.
The deaths take the toll for the current NSW outbreak to 352.
There are currently 1,055 COVID-19 patients in hospital in NSW, with 210 in intensive care units and 104 on ventilators.
Failing transmission rates mean non-urgent day surgery can recommence from 5 October at NSW private health facilities, but not yet at public hospitals.
Welcome news for NSW businesses
Meanwhile, NSW businesses will still have access to financial support despite authorities confirming lockdown measures would "definitely" lift on 11 October, when the state is expected to hit its 70 per cent double dose target.
The welcome news for NSW business comes after the federal government confirmed it would phase out its COVID-19 financial support when a state reaches 80 per cent double-dose vaccination coverage.
Treasurer Dominic Perrottet reassured eligible businesses in NSW that payments would continue until 30 November, provided they meet certain requirements.
Grants will continue for micro-businesses - those with a turnover of less than $75,000 - but halved to $750 a fortnight.
A slimmed-down version of the JobSaver program will also remain for businesses that have lost more than 30 per cent of their turnover.
Mr Perrottet said the support from the NSW government would cost about $500 million.
The state's peak business group said the measures would likely not be enough to save many struggling employers, while Opposition Leader Chris Minns said the funding was being wound back prematurely.
And while school classrooms opening one week early to students is welcome news for some, teachers unions have criticised what they say is a late audit of ventilation and COVID-19 safety requirements.
Education Minister Sarah Mitchell said the audit should be finished by early next week.
NSW Health on Friday also said it had detected virus fragments in sewage at Hastings Point and Ballina in the Northern Rivers region, Quirindi in the Northwest Slopes, and in Armidale and Tamworth.
People in those areas were encouraged to seek COVID-19 testing with even minor respiratory symptoms.
Meanwhile, non-urgent day surgery will recommence from 5 October at private hospitals and facilities due to failing COVID-19 transmission rates.
Non-urgent surgery at NSW public hospitals will remain postponed.
"This is to ensure we retain adequate system capacity, as well as patient, staff and public safety, for the delivery of healthcare services during the COVID-19 response," NSW Health said in a statement.
"Emergency surgery and urgent elective surgery will continue to be performed in public hospitals during the challenging period."
With SBS News
