NSW will accept an extra 500 returning Australians each week, provided other states double their intake.
Premier Gladys Berejiklian said she was prepared to accept almost 3000 returning citizens per week, with the daily cap to rise from 350 to about 420 people, after reaching an agreement with Prime Minister Scott Morrison on Tuesday.
Ms Berejiklian, who previously declared her state was doing the "lion's share" of accepting returned travellers, said her offer was conditional on both Queensland and Western Australia doubling their intake from about 500 to 1000 people.
"I was given an assurance (from the prime minister) other states would also take that load and on that basis I was very pleased to do our bit," she said on Wednesday.
"It would still only be about a third of what NSW is doing, but it certainly means they'd be sharing the load more."
Ms Berejiklian consulted with NSW Police Commissioner Mick Fuller, who is in charge of hotel quarantine, before deciding to accept the extra 500 travellers, which she described as a "manageable" load for NSW.
"I hope NSW is leading by example," she said.
"We know a lot of Australians are going through difficult situations - we never ask what state they're from, we just welcome them and support them in every way we can."
NSW recorded 10 new cases of COVID-19 in the 24 hours to 8pm on Tuesday, from 19,566 tests, compared with 8835 in the previous 24 hours.
Four of these cases were locally acquired, while one was linked to a known case or cluster and six were returned travellers who are in hotel quarantine.
Australian Associated Press