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Large swathes of the state are currently locked down and police are cracking down on compliance measures as authorities battle to contain the spread of the virulent Delta strain.
The seven deaths in the 24 hours to 8pm on Sunday comprise a woman in her 60s, three people in their 80s and three people in their 90s.
There are currently 1189 Covid-19 patients in NSW hospitals, with 222 in intensive care beds and 94 on ventilators.
"We are seeing a stabilisation in some local government areas of concern and that's positive, we hope that continues," Premier Gladys Berejiklian told reporters.
"However, we have seen also an increase in cases as we mentioned yesterday and the day before in the inner city areas of Glebe and Redfern."
Meanwhile, the NSW-Queensland border bubble is operating again, allowing people in northern NSW who aren't locked down to travel north of the border for essential work, school or medical reasons.
Also from Monday, up to five fully vaccinated adults who live outside the 12 Sydney Covid-19 hotspots areas can gather outdoors within five kilometres of their home.
Vaccinated households that live in the 12 local government areas of concern will be able to gather outdoors for recreation for two hours outside curfew hours and within five kilometres of home.
Additionally, those aged between 12 and 15 in NSW can now book in for Pfizer or Moderna Covid-19 vaccines with GPs or vaccine clinics as part of the staggered plan to get school students back to face-to-face learning later this month.
NSW has been warned of a "challenging" two months ahead, with peaks in Covid-19 cases and hospitalisations expected.