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Whole-genome sequencing has linked the case yesterday to a recent returnee who arrived in Australia from the United States. A household contact of yesterday's case has today returned a positive test.
An epidemiological link has yet to be determined between yesterday's case and the recent returnee.
Hipkins said while the new case announced today is not unexpected as a household contact of yesterday's case, officials have assessed that with several outstanding unknowns in the situation in Sydney it is safest to pause the quarantine-free travel from 11.59pm today. This will be under constant review.
Hipkins said health officials had been following the situation in Sydney closely.
A likely source had been identified in a managed isolation facility, he said.
But there didn't seem to be an "obvious link" indicating a chain of transmission.
"We do acknowledge this has the potential to disrupt people's travel."
Flights from NSW would be paused from 11.59 tonight for 48 hours he said.
The pause could be extended if further information comes to light.
"This isn't a decision we take lightly."
He said officials needed more time.
The risk from travellers from NSW remained low, he said.
No other states were included in the pause at this time.
"What you will see with cases like this ... is before we move to a restriction is we will gather enough information to make an informed decision."
"Everything is based on the information you have at the time. There will always be cases that are right at the margin where you need you to gather more information ... we are erring on the side of caution."
There was the ability to extend the pause depending on the information that came to light over the next 48 hours, he said.
On NSW contact tracing, he said he had a lot of confidence in the system and that it was one of the strongest in Australia.