The state's new infections came as the results of 97,201 tests were returned in the 24 hours to 8pm on Wednesday.
An unvaccinated woman in her 70s died at Wyong Hospital after becoming infected at the Hakea Grove aged care facility where she lived.
There are now 746 people in hospital, with 63 of them in intensive care and 24 on ventilators.
An emergency meeting of national cabinet took place on Thursday, with NSW Premier Dominic Perrottet saying ahead of the meeting he was hoping for changes to close contact definitions, isolation requirements, and wider use of rapid antigen testing.
Following the meeting Mr Perrottet announced about 5000 overseas arrivals flying in to Sydney every day will be able to obtain rapid antigen tests instead of queuing for PCR tests.
Close contacts and people who test positive for COVID-19 will only have to isolate for seven days.
"It's a more balanced approach, it's an approach that suits the circumstances of the time and NSW fully supports it," Mr Perrottet told radio station 2GB.
Mr Perrottet says using QR codes to track and trace individual cases played an important role when vaccination rates and case numbers were lower and strategy was focused on suppression, but no longer.
"Case numbers are going to increase, and as we learn to live alongside the virus the utility of those QR codes over time will completely dissipate," Mr Perrottet said.
NSW has recorded more than 40,000 new infections this week, with hundreds of thousands of people seeking tests, either due to sickness, close contact with confirmed cases, or to travel.
On Wednesday, NSW Chief Health Officer Kerry Chant warned "there is probably more disease in the community than the numbers reflect" as testing laboratories clear backlogs.
Thursday's 1025 increase in case numbers came from about 60,000 fewer test results.
Hospitalisations jumped by 121 with two more people being placed in intensive care.
NSW Health's Dr Michael Douglas said "we continue to see an over-representation of unvaccinated people admitted to ICU".
Meanwhile, public transport services will be reduced as infections and isolation requirements create staffing issues and the network faces lower patronage.
Transport for NSW says an "enhanced weekend rail timetable" will be introduced in January, similar to during the Delta outbreak.
Sydney Trains will be running on a modified weekend timetable, with additional services for peak and high-demand periods where required.
Rail, Tram, and Bus Union NSW secretary Alex Claassens told AAP some of those services will include the "tradie peak" that precedes the usual office commuter rush.
"As always, we try to run an essential service and so we'll continue to run those services as best we can with a limited number of staff that are going to be available," Mr Claassens said.
Transport for NSW chief operating officer Howard Collins said services "may also experience COVID-related staffing issues in the current environment", with hundreds of staff being impacted.
Mr Claassens told AAP on Thursday that 73 Sydney Trains employees had tested positive and another 76 were isolating after being identified as a close contact.
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