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A massive cheer went up as the first thunderous blast of a 12 minute display rattled the harbour.
Some eight tonnes of fireworks produced 100,000 individual pyrotechnic effects as the sky exploded in a riot of colour and light, with the centrepiece a rainbow tribute to the nation's historic same sex marriage vote and the upcoming 40th anniversary of Mardi Gras.
Among the crowds were same-sex couples, still basking in the recent victory of the yes vote.
Alex Parkes, who watched the fireworks with his partner, said the tribute had made him feel part of a greater community.
"I think it's a beautiful reminder of the progress achieved this year and exactly how far we've come," he told AAP.
For the first time, there was a countdown to midnight, with fireworks forming the numerals 10 to one on the Harbour Bridge.
The word "Sydney" then spread across the arch before a multi-coloured waterfall of fireworks cascaded down from the world famous structure.
In Sydney all harbour vantage points were full two hours before the 9 pm family fireworks lit up the harbour, building excitement for the $7 million extravaganza.
British holidaymaker, William Capstick, made sure his timing in Australia lined up with New Year's Eve so he could see the fireworks.
"It was amazing to see the harbour that way - the bridge and Opera House are so well known so it's so insane to see it like that," he told AAP.
He said the size of the crowd was something he didn't foresee but said it was handled much better than his own capital city's New Year's Eve celebrations.
"The city, right now, is packed as - but the police are moving everyone through quite well," he said.
"Better than London - by far."
Dozens of roads were shut down entirely in the CBD and the swelling crowds wandered down the empty streets past heavily armed police, anti-riot squads and into corrals around Circular Quay.
By 11.30pm police stopped the crowds entering entirely - forcing thousands to scramble for a view of the bridge between the skyscrapers.
"Prime vantage points filled up fast around the Sydney foreshore early in the evening and while a number of incidents occurred, most people were well behaved," Assistant Commissioner Mark Walton said.
NSW police's Operation Narimba, which began December 29, has seen seven people arrested for assaulting police and six for a number of other offences.
In Melbourne, thousands were undeterred by security fears despite the celebrations coming 10 days after a fatal vehicle attack near Flinders Street Station as revellers partied in 2018 underneath a spectacular 14-tonne fireworks show across the city.
A threat of thunderstorms had threatened to dampen New Year's Eve celebrations in Brisbane but the city dodged the worst of the severe weather that hit other areas, and revellers on the city's foreshores enjoyed two stunning pyrotechnic displays at 8.30 pm and midnight.
Revellers in Ipswich weren't so lucky, with celebrations cancelled because of the weather.
In Adelaide, revellers in Glenelg and the CBD were treated to fireworks displays at 9pm and midnight.
But the night wasn't completely without mishap - two pyrotechnicians were forced to jump off a fireworks barge on the NSW Central Coast and suffered minor injuries after a NYE display went horribly wrong.
Crowds were evacuated from the Terrigal beach after the barge caught fire just minutes into the New Year's Eve fireworks show shortly after 9pm on Sunday.
NSW Fire and Rescue said the two technicians were helped by onlookers before being treated by paramedics.
One 17-year-old boy suffered serious burns after fireworks exploded in Cromer Heights just before midnight and is in hospital for treatment, police said.