The pause to the transtasman bubble is only for flights from NSW, and it started from midnight last night.
The move was welcomed by Te Pūnaha Matatini principal investigator Professor Michael Plank, who said leaving the door open would have run the risk of importing a case into New Zealand from NSW.
"There are a few red flags - the obvious one being no clear epidemiological link to the border (case). There's also the positive test in the sewage, and the fact that the person has been to a lot of locations of interest," he told The New Zealand Herald.
"Taken together, that means there's a risk there could be quite a lot of cases out there. This decision is very much in line with the traffic light system that the Government set out for managing the bubble, which is to pause travel for a couple of days in a situation like this until we're confident that the outbreak is contained."
New South Wales health officials have added more locations of interest in relation to the Sydney Covid cases overnight.
Up to 23 locations are now appearing on the NSW Government Health's official website. It shows the positive cases were in the community from as late as Tuesday afternoon.
He urged them to isolate and call Healthline on 0800 358 5453 if they've been to the NSW locations of interest.
"This isn't a decision we take lightly," Hipkins said, adding that it was a line call.
"We do acknowledge this has the potential to disrupt people's travel ... We are erring on the side of caution."
With several daily flights from Sydney to New Zealand, thousands of travellers will have their plans disrupted.
Hipkins said people flying from New Zealand to NSW should be flyer-beware and weigh the risks of that themselves.
NSW has not gone into lockdown but restrictions have been put in place, including compulsory masks in indoor venues and no gatherings larger than 20 people.
Genome sequencing has linked a community case in Sydney, a man in his 50s, to a traveller who arrived from the US, who was moved to a quarantine facility on April 28.
One of the man's household contacts, a woman in her 50s, returned a positive test yesterday.
But it remains unclear how they caught the virus, meaning there could be several links in the chain of transmission between them and the traveller who might still be in the community without knowing they have the virus.
It's believed neither the man nor the woman had recently travelled overseas, worked in a hotel quarantine, border or health role, or come into contact with someone who did.
Those in NSW who were at the locations of interest have been asked to follow local health advice regarding isolation and testing - and to not travel to New Zealand.
Anyone who tried to fly to New Zealand from NSW via a different state might be picked up by border agencies' data-matching systems, Hipkins said - though these systems were not quick enough to catch a traveller who broke bubble rules recently by travelling from Perth.
Prime Minister Jacinda Ardern said that preparing for "scenarios like these" was all part of having the transtasman bubble.
She was happy with how quickly New Zealand was informed of the NSW case and the level of engagement with NSW health officials.
"So far, that information sharing has been very good."
