As of Wednesday, July 1, the state government green-lit up to 500 participants at community sports activities - modifying the previous rule which allowed up to 25 per cent of ground capacity at an outside venue.

Where activities involve more than 20 participants, which include players, officials and spectators, a COVID-Safe officer must be in attendance.

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"The community has worked incredibly hard over the past few months which has allowed us to be where we are today," NSW Premier Gladys Berejiklian said.

"However we can't let our guard down.

"People need to come forward for testing with the mildest of symptoms and practise good hand hygiene and social distancing."

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This easing of COVID-19 restrictions has also seen kids' and adult sport allowed to resume from Wednesday.

Cultural and sporting events at large stadiums, racecourses and motor racing tracks will be allowed up to 25 per cent of their normal seated capacity, to a maximum of 10,000 - these events must be ticketed, seated and follow strict guidelines.

While the number of people allowed inside indoor venues will be determined by the 'one person per four square metre' rule, with no upper limit.