Curfews from 9pm to 5am in western Sydney's 12 local government areas of concern will also be lifted immediately.
Most of NSW is locked down and police are cracking down on compliance measures as authorities battle to contain the spread of the virulent Delta strain.
Of the 12 people who died in the 24 hours to 8pm on Tuesday, there was one woman in her 30s, two people in their 50s, three people in their 60s, three people in their 70s, two people in their 80s and a man in his 90s.
It takes the toll for the current outbreak to 198.
There are 1241 Covid-19 patients in hospital in NSW, with 234 in intensive care beds and 108 on ventilators.
Premier Gladys Berejiklian on Wednesday said NSW had now surpassed 80 percent single-dose vaccination coverage.
Significant freedoms will be restored to the fully vaccinated at 70 percent double-dose coverage, with further freedoms - including international travel - at 80 percent double-dose coverage.
The 70 percent milestone is expected in mid-October.
"We know it's been a stretch. We know it's been a struggle but there's only a few weeks left before we get to 70 percent double dose," Ms Berejiklian told reporters.
Meanwhile, Australian Defence Force personnel have joined NSW Police in the Illawarra region to help with Covid-19 welfare and compliance checks as cases of the virus increase.
Soldiers are already helping police patrol the 12 Sydney local government areas considered hotspots.
Health authorities became concerned in the Illawarra Shoalhaven Local Health District after it recorded 80 cases on the weekend and 17 more on Monday.
The coastal area includes the state's third-largest city of Wollongong.
Southern Region Commander Assistant Commissioner Joe Cassar has welcomed the arrival of troops in the Illawarra, saying they would make visits on those self-isolating.
Additionally, the future of southwest and western Sydney will be debated during a two-hour economic recovery summit hosted by the NSW opposition on Wednesday.
A nursing home in western Sydney that was the scene of a Covid-19 catastrophe last year has also been locked down after another virus scare.
A Nepean Blue Mountains Local Health District spokesperson said a doctor who visited three residential aged care facilities in the area while potentially infectious has tested positive for Covid-19.
The doctor was fully vaccinated and wore a surgical mask when he visited SummitCare, Anglicare Newmarch House and Mountainview.
