The two people who had received the both doses of the COVID vaccine both acquired their infections in aged care facilities.
There have been 372 COVID-19 related deaths in NSW since the start of the outbreak and 428 since the start of the pandemic.
There are currently 981 COVID-19 cases admitted to hospital, with 195 people in intensive care, 93 of whom require ventilation.
Of the 195 in intensive care, 140 are not vaccinated, 41 have received one dose of a vaccine and 14 have received two doses.
Health Minister Brad Hazzard described Sunday's caseload as a "dramatic drop".
"Quite a dramatic drop in the last three weeks. I want to thank the community for all of the work [it] has done to make sure that they have followed all of the guidance on the public health team and ensured that this virus is reducing its circulation, particularly in the Sydney region."
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But Chief Health Officer Dr Kerry Chant cautioned people not to get too excited by the decline in case numbers on Sunday, which were down from 813 on Saturday, saying one day "does not make a trend" and pointing out the "weekend effect" of lower testing numbers.
She described the coming week as "critical" in trying to get numbers as low as possible before the state starts to open up.
"We do know that we will expect some breakthrough infections in people that are fully vaccinated. There is still a lot to learn about how infectious people are that are fully vaccinated, whether there is any changes in their ability to transmit and in what settings, so we still have a lot to learn about Delta."
While case numbers are going down in areas of metropolitan Sydney, there were "increasing trends" in the regions, including Wollongong, Newcastle, Maitland, Wellington, Oberon, Queanbeyan and Deniliquin.
Casino is currently in lockdown, with stay-at-home orders applicable to anyone who has visited the northern NSW town since 24 September.
Vaccinated close contacts to isolate for only seven days
From 11 October, when NSW is expected to reach its 70n per cent double dose vaccination target, close contacts who are fully vaccinated will only be required to be tested and isolate for seven days, down from 14 days, Dr Chant said.
Positive cases will still be required to self-isolate for 14 days, regardless of whether or not they are vaccinated.
She said the fully vaccinated are less likely to acquire the infection.
"We know most cases with the majority of the cases will occur in the full first seven-day period so it is just taking that risk assessment that in those setting," she said.
"If they remain well on day seven ... then they have got very, very little chance of becoming infectious afterwards.
NSW residents told to be vigilant ahead of NRL grand final
The health minister has urged NSW residents to remain vigilant on Sunday and not fall into the trap of disregarding COVID-19 restrictions while enjoying the NRL grand final.
Although the rugby league decider is being held out of state in Queensland for the first time, Sydney fans will be buoyed by the fact two of their own teams are contesting the event - South Sydney and Penrith.
Source: AAP
"Please be careful. There are limits on the numbers of people who can currently gather together, you shouldn't be having people at home.
"Your home remains one of the most dangerous places to be in terms of transmission of the virus. And we need to make sure that we all enjoy the game but we don't have a super spreader event."
Non-urgent day surgery will recommence in NSW private health facilities on Tuesday as transmission rates continue to fall. However non-urgent procedures at NSW public hospitals will remain postponed.
With AAP.
More to come...
NSW reports 667 new local COVID-19 cases and 10 deaths - SBS News
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