A man in his 50s from Sydney's eastern suburbs has tested positive to coronavirus.
He has not been overseas or worked in Sydney's hotel quarantine system.
Authorities believe the man had been infectious since Friday.
Contact tracers from NSW Health are urgently working to identify the man's contacts and genomic sequencing is underway, with results expected in the next 24 hours.
NSW chief health officer Kerry Chant said the man had a number of close contacts who were being tested and isolated.
The man also visited a number of venues while potentially infectious, but Dr Chant said he had been meticulous about checking in with QR codes.
NSW Premier Gladys Berejiklian said it was too early to say if coronavirus-related restrictions needed to be tightened.
"We have to assume there's other cases and our response will be proportionate as it always has been in NSW," Ms Berejiklian said.
"Everybody in the state needs to be on high alert.
A Federal Court challenge has been lodged against the Morrison government's decision to make it a criminal offence for Australians to return home from India amid surging coronavirus cases in that country.
Pressure from health experts and public figures has been mounting since the federal government announced a freeze on flights from India to Australia until May 15.
The Morrison government has insisted that no Australians will be jailed for dodging the Indian travel ban.
Deputy Prime Minister Michael McCormack on Wednesday said there needed to be a hard line but ruled out biosecurity laws being applied.
Health Minister Greg Hunt revealed the pause in flights from India had slowed the rate of positive COVID-19 cases in quarantine in Australia.
Mr Hunt said there had been 80 positive cases out of 23,000 arrivals in the past seven days, or a rate of 0.3 per cent.
"We have dropped from 13 per cent (positive rate) to 0.3 per cent, so that's the significance," Mr Hunt said.
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