NSW has recorded 89 new locally acquired Covid-19 cases and the second death linked to the current Delta variant outbreak.
Chief health officer Kerry Chant said a man in his 70s from Sydney's eastern suburbs had died overnight after contracting Covid-19.
Only two days ago a woman in her 90s from south-west Sydney died after becoming infected.
Out of the 89 new cases 21 were infectious in the community.
The state's outbreak has now spread to the regions, with a case detected in Goulburn, about 200 kilometres from Sydney.
The ABC has been told the person who tested positive is an essential worker who travelled from southern Sydney to Goulburn.
The person had been working on the construction of the new Goulburn Hospital.
The Southern Local Health District is opening up additional pop-up testing clinics in Goulburn.
Until now, the growing NSW Covid-19 outbreak has been confined to the Greater Sydney and its surrounds.
Authorities had warned of dangerous consequences if the virus were to leak into regional areas.
Mayor of the Goulburn Mulwaree Council Bob Kirk says Goulburn is particularly vulnerable as the city is on a major highway.
Kirk said he understood the construction site has been shut as a result of the positive case.
"With the current stay at home orders of course people can have work exemptions," he said.
"Of course the Covid virus doesn't run around identifying who has a work exemption and who hasn't."
Goulburn is part of the Southern Highlands which has not been subject to the three-week lockdown imposed on Greater Sydney, the Blue Mountains, Central Coast, Wollongong and Shellharbour.
However all regional areas outside of the lockdown have had to adhere to a raft of social distancing restrictions.
Shortly after the new positive case was announced the Queensland Premier said her government would most likely now consider Goulburn a hotspot.
This new case is also likely to put Canberra on high alert as Goulburn is only around an hour from the nation's capital and many workers commute between the cities every day.