NSW Premier Gladys Berejiklian has declared a seven-day state of emergency starting on Friday at 9am (local time) due to the ongoing bushfire crisis.
It will mean forced evacuations and road closures for people in bushfire zones ahead of Saturday's forecast "horrible" fire conditions.
NSW Rural Fire Service (RFS) Commissioner Shane Fitzsimmons said Saturday is likely to bring conditions more dangerous than New Year's Eve, when bushfires left seven dead and thousands in peril.
"There'll be real challenges and very real risks associated with what's being forecast and predicted for fire spread under the sorts of weather conditions we're expecting as we head into Saturday," he said.
"The conditions on Saturday are likely to be worse than New Year's Eve and a lot of those areas in the south-east quadrant of the state have the potential to be impacted - and impacted very heavily."
A "tourist leave zone" has been declared for a 14,000-square-kilometre area between Nowra and the edge of Victoria's northern border.
The NSW RFS initially declared a leave zone between Batemans Bay down to the border and extended that zone to the area between Nowra and Ulladulla late on Thursday.
It is the "largest mass relocation of people out of the region that we've ever seen," NSW Minister for Transport Andrew Constance said.
RFS Deputy Commissioner Rob Rogers said it was a race against the clock to get tourists out before Saturday.
"We have so many fires still burning down there … and quite close to communities as well," he said.
"We won't get containment on those fires before Saturday."
Residents told to evacuate in southern NSW
Strong winds, scorching temperatures and low humidity are forecast for Saturday with temperatures set to hit 41 degrees Celsius on the South Coast.
Read more on the Australian bushfire coverage:
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The Princes Highway is closed between Milton and Tomerong, and between Batemans Bay and Moruya.
The Kings Highway, which connects Batemans Bay to Canberra, remains closed.
However, George Bass Drive, which runs along the coast, is open south of the Bay, with heavy traffic conditions in place.
Any changes to traffic conditions will be updated on the NSW Live Traffic website.
Police and emergency services have been escorting people out of the Bendalong, Manyana and Cunjurong areas - north of Ulladulla - about 20 cars at a time.
Those villages were cut off after the Currowan fire decimated large swathes of Conjola Park.
Traffic on major highways is heavy as holidaymakers attempt to flee the region under reduced speed limits.
"People are going to have to be patient on the roads," Constance said.
"We need people to stick to the major roads, stick to the roads that are open."
Journalist Phil Coorey was traveling between Cooma and Bega and described a major traffic jam with many hundreds of cars, caravans and trucks backed up as far as he could see.
"There were hundreds, if not thousands, more cars as I got past the tailback coming the other way to add to it," he said.
"I saw one police car on the entire trip. I stopped at an RFS checkpoint and told these traffic guys and they said they're aware of it but 'the police are too stretched'."
Sydney ABC reporter Johanna McDiarmid was holidaying with her family in Ulladulla and said it was "bumper-to-bumper" in South Nowra.
They had detoured through into Conjola Park, where scores of homes were razed, to collect family friends before travelling further north towards Wollongong.
"You could see the power poles on the roads, powerlines across the driveway," she said.
Town 'not defendable'
In the south of the state, residents in the town of Batlow have been told their community will not be defendable if fire forecasts become a reality tomorrow afternoon.
The area is home to 1,300 people.
The Dunns Road fire, which is threatening the town, also prompted the evacuation of the Kosciuszko National Park and a nearby prison on Thursday, after burning through 130,000 hectares in recent days.
The RFS designated a leave zone around the town and surrounding country on Thursday afternoon, and told residents to get out urgently.
"If you are in this area, particularly in the general area from Batlow North to Wondalga, and west to Blowering Dam, you need to leave before tomorrow," the notice said
Fuel demands overwhelm supply
Constance acknowledged that many evacuees were struggling to find fuel - long queues were seen stretching out from petrol stations around Batemans Bay.
"We're trying to get out of here as the authorities want us to leave," holidaymaker Tracey Feeney said.
"So we're just waiting for all their garages to open up, they've apparently got no power still."
Constance said tankers carrying up to 60,000 litres of fuel were brought in overnight.
"People are queueing up to get into petrol stations," he said.
"Obviously there is a limit ... so people need to gauge their fuel.
"You can't leave on an empty tank, because the power is off in a lot of places. We need people to be well planned."
Frustrated and worried people are forming lengthy queues outside supermarkets, hoping to stock up on food, camping supplies and other necessities.
A patient crowd lined up outside Moruya Woolworths, where limited staff were permitting 20 people at a time to manage the situation and avoid rushes.
The evacuation order came as the RFS revealed 382 homes were destroyed by the South Coast fires on New Year's Eve.
It brings the total number of homes lost this bushfire season to 1298.
Deputy Commissioner Rogers said the destruction was going to get a lot worse.
"The unfortunate part of this is that that's not the end of it," he said.
"There are more homes that are lost and crews will be out again today trying to account for all of those so we can give residents surety on what's happened to their particular homes."
Eight people are known to have died since Wednesday in a horror week for bushfires across the country, including a father-son duo and a volunteer firefighter.
A 63-year-old man and his 29-year-old son died in Cobargo on Tuesday while defending their property and volunteer firefighter Samuel McPaul died after his truck flipped in a fire tornado in Jingellic, just north of the Victorian border.
Another three bodies were found at Lake Conjola, and one man was found in a burnt-out car at nearby Yatte Yattah.
Constance said the speed of the fire on New Year's Eve should be a warning to locals and visitors about the dangerous conditions forecast for Saturday.
"I think the fire moved at a pace that no-one expected. It shot round the back of Nelligen to Runnyford, hit Mogo pretty hard and then just burned through to the beach," Constance said.
"It's devastating, but we'll pull together."