People from NSW will soon be banned from Queensland while those returning from coronavirus-hit Victoria will be forced into two weeks of hotel quarantine.
NSW Premier Gladys Berejiklian says entry to NSW from Victoria will be restricted to flights landing at Sydney Airport, except for border community residents with permits.
Those returning through the airport will from Friday be sent into 14 days of hotel quarantine at their own expense, alongside those returning from overseas.
"There should be no difference from a NSW citizen coming back from an overseas destination in terms of the costs they have to pay," Ms Berejiklian told reporters on Wednesday.
"We will do whatever it takes to keep NSW safe, that has always been our position, and there's no doubt the situation in Victoria is top of mind for us.
"The health advice, as it should be, is ever-evolving."
Ms Berejiklian said the conditions around "critical service" travel to Sydney from Victoria, such as for a funeral, would also be tightened this week.
Victoria recorded a record 725 COVID-19 cases and 15 deaths on Wednesday, statistics NSW Health Minister Brad Hazzard admitted came as a shock.
"The government here is extremely concerned that sadly the Victorian situation is not showing any marked signs (of improvement), that is certainly influencing us as a government and the government's decision-making," Mr Hazzard told reporters.
"The results in Victoria have been extremely disturbing to me as health minister."
Deputy Chief Medical Officer Michael Kidd said earlier on Wednesday that arrivals at Sydney Airport from Melbourne should wear a mask until they reached their accommodation.
NSW reported 12 new COVID-19 cases in the 24 hours to 8pm on Tuesday, which followed news the Queensland government had declared the entire state a virus hotspot.
The NSW-Queensland border will be again shut from 1am on Saturday.
"We have seen that Victoria is not getting better and we're not going to wait for NSW to get worse ... we need to act," Queensland Premier Annastacia Palaszczuk told reporters.
Ms Berejiklian said that decision was a matter for the Queensland government.
Of the 12 new cases in NSW, just one was in hotel quarantine. There were two linked to the 105-person Thai Rock Wetherill Park restaurant cluster, two connected to The Apollo restaurant in Potts Point and six associated with the funeral cluster.
One of the new cases was locally acquired with no known source.
Two COVID-affected students from Greenway Park Public School were confirmed in Wednesday's case numbers following a pupil from Bonnyrigg High School on Tuesday. Both schools in Sydney's southwest reopened on Wednesday after cleaning.
The three students are linked to cases who attended the Mounties club in Mount Pritchard, connected in turn to the 46-person funeral cluster.
The Kids Learning Academy daycare centre in Busby, in Sydney's southwest, has also closed for deep cleaning after a COVID-positive person attended on July 29.
St Margaret Mary's Primary in Merrylands later on Wednesday was also shut for cleaning and contact tracing after a case was confirmed at the school. Students and staff have been advised to self-isolate until further information is available.
Australian Associated Press