New South Wales has reported 265 new locally acquired cases of COVID-19 and five deaths, as thousands of children head back to school and more restrictions are eased for fully vaccinated adults.
There are 606 COVID-19 cases in NSW hospitals, with 132 people in intensive care and 71 on ventilators.
The new deaths take the state's total since 16 June to 475, and to 531 since the start of the pandemic.
More than 80 per cent of people over 16 are now fully vaccinated in NSW, which on Monday triggered a promised second stage easing of restrictions as the state continues to emerge from nearly four months of lockdown.
A week after stay-at-home orders lifted and fully vaccinated people were allowed back at NSW pubs and beauty salons, people who have received two doses of a COVID-19 vaccine are now free to play community sport and have a dance at the pub, and are allowed to do it with larger groups of people.
Students in years 12 and one, as well as kindergarten kids, are returning to classrooms, ahead of other grades who will return next week.
NSW Education Minister Sarah Mitchell says teachers are ready to welcome children back.
"It's a good day. It's wonderful we have students in the back in the classroom," she told the Nine Network on Monday.
When a COVID-19 case is identified in a school it usually closes for about a day for cleaning and contact tracing.
Students are returning to classrooms as the state enters the second phase of its reopening. Source: AAP
But Ms Mitchell says each situation will be now be considered on a case-by-case basis to minimise disruption.
"If it is a kindergarten child and a few kids in the class who are impacted it might be that year group has to stay-at-home for 14 days," she said.
"If the teacher is fully vaccinated they won't for instance."
NSW Premier Dominic Perrottet said there will be "teething issues" with the return to school "but those challenges do not outweigh the importance of getting kids back in the classroom".
Outdoor gatherings of up to 50 fully vaccinated people are now permitted, and up to 20 visitors are allowed in a home, provided everyone over the age of 16 is vaccinated.
People can once again stand up while drinking and even have a dance in most hospitality venues, but not yet nightclubs, which are allowed to reopen so long as people sit down while they drink and don't dance.
A 100-person cap on weddings and funerals has been lifted.
A five-person cap at hairdressers and beauticians is now gone too.
Office workers are no longer required to wear masks at work, but they're still required in other indoor areas such as on public transport or in a retail shop.
Mr Perrottet said the state had "a bright summer ahead" but that "this is not going to be an easy time".
"As we know, as we open up, cases will increase. Hospitalisations will increase ... I am confident that as a state we will come together and get through it," he said.
The lifting of restrictions only applies to people who have been fully vaccinated at this stage, but will be expanded to everyone in December.
Mr Perrottet said he had reached out to Victorian Premier Daniel Andrews about co-operating over border arrangements as both states emerged from lockdown.
"Their case numbers are still high but it's pleasing to see they are opening up," he said.
From Wednesday fully vaccinated people travelling from NSW red zones can go to Victoria without quarantining after a negative COVID-19 test but must isolate and get tested again within 72 hours of their arrival.
People entering NSW from Victoria are still required to complete an entry declaration form and quarantine at home for 14 days.
With SBS News.
