Twelve people have been fined over a Sydney wedding reception at inner city Pyrmont on Sunday after police discovered a number of guests were from the northern beaches.
Residents of the peninsula are currently not permitted to leave the area.
"All of us are shaking our heads, absolutely aghast that has occurred," Premier Gladys Berejiklian told reporters on Tuesday.
"If you do the wrong thing, you will get caught, especially when it is so brazen."
Police Assistant Commissioner Mick Willing said more fines would be issued over the cross-city reception.
Police Minister David Elliott described the breach as a "bastard act".
Meanwhile, authorities are scrambling to source three NSW virus cases diagnosed without an immediate link to the northern beaches cluster.
One lives in Wollongong on the state's south coast but recently visited Sydney. The others live in Sydney's inner west and north.
Sydneysiders have been mostly banned from watching the famous New Year's Eve fireworks from the harbour with the foreshore fenced off.
The state government is telling people to stay at home and watch the shortened seven-minute midnight firework show on TV.
The federal government has also warned it could punish backpackers or expatriates who breach public health orders with deportation.
Meanwhile, Victorians are being urged not to venture into Melbourne's CBD to celebrate New Year's Eve unless they have a booking.
Acting Premier Jacinta Allan on Tuesday said while the state had racked up its 60th day without any locally-acquired transmission of coronavirus, it was crucial to minimise movement into the city on December 31.
Although Victorian hospitality venues had demonstrated strong COVID-safe practices, she said "other movement" could cause risk of transmission.
"The only people allowed into the CBD over the New Year's Eve period are those people that already have a booking at a hospitality venue in the city," she told reporters.
The first Australian case of a South African variant of COVID-19 thought to be more contagious has been detected in Queensland.
Chief Health Officer Jeannette Young said the case involved a woman who arrived on December 22 and was immediately placed into hotel quarantine.
The woman was transferred via ambulance to the Sunshine Coast University Hospital.
