Gladys Berejiklian has been forced to defend bringing in a host of new restrictions after New South South Wales recorded just two new cases of Covid, declaring it was still 'business as usual'.

The NSW Premier announced on Thursday face masks will be mandatory indoors and dancing will be banned expect at weddings across Greater Sydney, including Wollongong, Central Coast and Blue Mountains under the measures.

Household gatherings have also been limited to just 20 people and drinking while standing up is not permitted at indoor venues.

The new restrictions come into effect at midday on Thursday, will be enforceable from 5pm, and will stay in place for the course of the weekend.

Ms Berejiklian came under for fire for going 'so hard, so fast' - but she hit back, arguing the government's response was 'extremely proportionate' and adding 'everybody will be able to go about their business' despite the restrictions.

She also took a dig at her counterparts in other states, including Mark McGowan in Western Australia and Annastacia Palaszczuk in Queensland, who locked down cities in response to Covid cases.

'Our decision is based on advice. It's proportionate. If this was Queensland or WA or anywhere else, they would have shut down the whole city,' Ms Berejiklian said.

'They would have shut down businesses, they would have said stay at home. They would have said don't go about your business.

'Unlike other premiers, we're not shutting down the city. We're not changing the two square metre rule. Quite the contrary. We're saying to everybody business as usual.'

'In other states... they would have stopped events, they would have said you can't dance at weddings. We're not doing any of that. This is a very proportionate response to the risk.'

The two Covid cases were a husband and wife from Sydney's eastern suburbs.

The man's test result, which were first announced on Wednesday, sent shockwaves through the city because he had not returned from overseas and does not work in border control, health care or at a quarantine facility. His wife later tested positive.

NSW Health have now linked his infection to a returned traveller from the U.S. who contracted an Indian variant of the virus - but it is not known how the pair came into contact with each other.

'We know that at least one person with the virus has been going around their business and we haven't found them yet,' Ms Berejiklian said.

'We don't know where they've been. We don't know if they've been to major events. We don't know who they've sat next to. We know for sure that someone with the virus has been moving around the community.'

Ms Berejiklian reiterated the importance of the state having a 'proportionate response' until the missing link between the infected man and the returned traveller was found.

But she was adamant the restrictions announced would not have a profound impact on resident's day-to-day lives.

'People can still enjoy Mother's Day. They can go about their business. Outdoors you can do what you do now,' Ms Berejiklian said.

'If you're in an indoor setting, know that that's high risk. Wear a mask. If you're going to the supermarket, wear a mask. These are precautionary measures until experts find information.'

NSW chief health officer Dr Kerry Chant said health officials are reviewing CCTV footage to see how the returned traveller may have infected the man from Sydney's east.

'What we're concerned about is that there is a missing link,' she said.

'We can't find any direct link between our case, so what we're concerned about is there is another person that is as yet unidentified that infected our case.'

Health authorities have also identified two new venues of concern as part of its ongoing investigations.

One of the Covid-positive cases dined at ?Fratelli Fresh in Westfield Sydney on Tuesday from 1.15pm to 2.15pm.

Bondi Trattoria on Campbell Parade has also been listed as a potential exposure site after it was attended by a case on Thursday, from 12.45pm to 1.30pm.

Anyone who attended the two venues at the times specified is asked to get tested and isolate until NSW Health provides further advice.

Ms Berejiklian and Dr Chant on Wednesday said the infected man had a 'high viral load' and was potentially highly infectious while in the community.

He visited a busy Woolworths supermarket, several BBQ shops, a golf club, a cinema and many cafes and restaurants between Friday April 30 and Tuesday May 4.

'Our job now is to get on top of it to identify any other potential cases, to identify the source and make sure we get on top of this case,' Ms Berejiklian said.

There are now 19 'venues of concern' across the city from Double Bay in the east, to Collaroy in the north, and Silverwater in the west.

Dr Chant said the man had a higher viral load than typically seen in infected people, increasing the likelihood that he spread the disease to others.

More than 42,000 people in the inner west have also been put on high alert after virus fragments were found in wastewater from a sewage plant.

Affected suburbs include Marrickville Dulwich Hill, Summer Hill, Lewisham, Ashfield, Haberfield, Petersham, Lilyfield and Leichhardt.

NSW Health urged everyone in those areas to be especially vigilant in monitoring for symptoms, and if they appeared, to get tested and isolate immediately until a negative result is received.

The Covid-positive man visited a Bondi Junction cinema and several shops while infectious in what was described as a 'very active' weekend.

All customers of every business listed have been told to isolate immediately and seek urgent testing, including a busy Woolworths and Chemist Warehouse in Double Bay, a golf club in Rose Bay, and a series of cafes in Moore Park.

They must continue to isolate, regardless of their test results, until more information emerges.

Anyone who attended one of the following venues at the times specified is asked to immediately get tested and isolate until NSW Health provides further information.

Tuesday April 27, 1.15pm - 2.15pm

?Thursday April 29, 12.45pm - 1.30pm

District Brasserie, 2 Chifley Square in Sydney

Friday April 30, 11am - 11:45am

HineSight Optometrist, Sofitel Sydney Wentworth - P2/61-101 Philip Street in Sydney

Friday April 30, 12pm - 1pm

Barbetta, 2 Elizabeth Street in Paddington

Friday April 30, 1:30pm - 2:30pm

Friday April 30, 6pm – 8pm

Friday April 30, 8.45pm – 11pm

Saturday May 1, 1pm –1.45pm

Saturday May 1, 1pm – 1.45pm

Saturday May 1, 2pm – 3pm

Saturday May 1, 4pm – 5pm

Saturday May 1, 4.30pm – 5pm

Sunday May 2, 3pm – 4pm

The Stadium Club, Moore Park - Entertainment Quarter, 122 Lang Road

Monday May 3, 11.30am - 12.30pm

Azure Cafe, Moore Park - Entertainment Quarter, Shop 5a

Monday May 3, 12.30pm - 1pm

The Royal Sydney Golf Club, Kent Road, Rose Bay

Monday May 3, 12.30pm - 1pm

Rug Cleaning Repairs Hand Rug Wash Sydney, 8/52-54 Sydenham Rd, Brookvale

Monday May 3, 12.30pm - 1pm

Alfresco Emporium, 2021 Pittwater Rd, Collaroy

Tuesday May 4, 1pm - 1.30pm

Smith Made, 14/28 Roseberry Street, Balgowlah

Tuesday May 4, 2.30pm - 4pm

Chemist Warehouse, 459-463 New South Head Road, Double Bay

Tuesday May 4, 3.45pm - 4pm

Woolworths, Kiaora Lane and Kiaora Road, Double Bay

Tuesday May 4, 4.05pm - 4.15pm