NSW reported 466 new locally-acquired cases in the 24 hours to 8pm on Friday, and four deaths.
Police indicated they would also be out in full force in affected Local Government Areas, with officers able to impose larger fines of $5000 for breaching public health orders.
An additional 500 ADF personnel will be deployed on top of 300 already in NSW.
Deputy Premier John Barilaro announced the precautionary lockdown after rising numbers in regional areas and virus fragments were found in sewage systems in places with no known cases.
It came on Saturday afternoon on Twitter after Premier Gladys Berejiklian made no mention of it at her 11am press conference.
"It's to make sure that we don't become overwhelmed. A lot of our small regional communities don't have an ICU unit so we would be transporting people from little town to some of the major centres," Mr Barilaro told ABC News.
The Australian Medical Association had implored the state government to lock down saying the health system could no longer manage the alarming increase in case numbers.
"Our already fragile rural and regional health system will be unable to cope with increases in cases," AMA NSW President Dr Danielle McMullen said in a statement.
Restrictions also tightened in Greater Sydney from next week with exercise restricted from ten kilometres to five from the home.
"Exercise means exercise, many people know that but unfortunately some people were trying to get around the rules imposed," Ms Berejiklian said.
People in Greater Sydney will also need a permit to travel to regional NSW, and single people will need to register their "singles buddies".
The biggest increases in case numbers in western Sydney were in Blacktown, Doonside, Mount Druitt, Maryland, Guildford and Auburn.
Of the new local cases, 121 are linked to known outbreaks and 345 are under investigation, while 87 people were in the community for all or part of the time they were infectious.
In newly-locked down regional areas people must only leave their residence for an essential reason, with all schooling to be conducted from home.
Everyone must carry masks at all times, no visitors are allowed in the home unless for carers' responsibilities or for compassionate reasons, and those in a relationship.
While Greater Sydney has endured lockdown for nearly seven weeks, Mr Barilaro said he hoped the newly-locked down regional communities could be out in a week if they did the right thing.
