NSW's Chief Health Officer Dr Kerry Chant has predicted as many as half the population could contract Covid in the current wave.
Dr Chant said on Friday that not all of those infections will by symptomatic - with many not even knowing they are infected.
'There will still be people that have not experienced or been exposed to Omicron,' she said.
Dr Chant made the prediction at a news conference where she confirmed the state had recorded 63,018 infections and 29 deaths in the past 24 hours.
Officials unveiled new modelling which revealed NSW hospitals are coping better than expected with treating Covid-19 patients.
Just 184 patients are currently being treated for Covid-19 in the state's intensive care wards - well below the capacity of 1,000.
Chief health officer Dr Kerry Chant made the prediction at a media conference on Friday
New modelling has also revealed hospitals are coping better than expected with the surge of Covid-19 patients
The modelling, released by NSW Health on Friday, shows that number is drastically less than other scenarios that were predicted by experts.
The figures were drawn up based on the spread of the virus in New York and London and forecast ICU admissions to be more than 200 in the first scenario and more than 500 in the second.
It comes despite case numbers continuing to rise throughout the state with 63,018 new infections and 2,525 hospitalisations reported on Friday.
Chief health officer Dr Kerry Chant revealed health authorities would slowly be phasing out the term 'close contact' and shifting their focus to vulnerable residents.
The health department has released a detailed list of critical workers who bosses can deem exempt from isolating even if they are household close contacts of a positive Covid case.
Workers who show no symptoms and are employers believe are 'critical' will not have to go into quarantine under a raft of new rules agreed to by national cabinet this week.
In NSW, nurses, correctional officers, retail staff, electricity, gas and liquid fuel services workers, water suppliers, sewerage, sanitation and drainage workers will each be allowed to return to work.
So will workers in information and telecommunications, social assistance and welfare services, funeral, crematorium and cemetery services, seaport operations, air and sea freight and logistics - as the country faces a worker crisis amid a widespread Covid outbreak.
The changes come as Chief Health Officer Dr Kerry Chant revealed plans to eventually phase out the term 'close contact' and shift the sole focus to high risk residents.
Speaking at a press conference on Friday, premier Dominic Perrottet revealed 'close contacts' would no longer refer to residents who had visited the same sites as a positive case.
'A close contact definition is legally someone who is a household contact of a COVID positive case,' he said.
'I think it is incredibly important that we realise that simply because you may get a notification through your Service NSW app you might have been at the grocery store or you might have been at a restaurant. That does not constitute a close contact.'
Speaking at a press conference on Friday, premier Dominic Perrottet revealed 'close contacts' would no longer refer to residents who had visited the same sites as a positive case
A graphical depiction of actual hospitalisation rates compared to projected figures based on several different scenarios
Australia's medical chief says COVID-19 may have already peaked in NSW after the state notched a record daily high in new cases with the addition of rapid antigen test results
Chief Medical Officer Professor Paul Kelly says coronavirus case numbers in the state are close to peaking
