The Hunter will lock down for a week, NSW Premier Gladys Berejiklian has announced.
All Hunter LGAs will fall under the harsher restrictions as seen in greater Sydney and the Central Coast from 5pm on Thursday, August 5.
New restrictions will be introduced for Newcastle, Lake Macquarie, Maitland, Port Stephens, Singleton, Dungog, Muswellbrook and Cessnock until at least 12.01am on Friday, August 13.
"Everyone in these areas must stay at home unless it is for an essential reason," NSW Health advises.
"They also cannot have visitors in their home. This applies to all social visits from those outside your household, including family and friends.
"People still can have one visitor at one time to fulfil carers' responsibilities or provide care or assistance, or for compassionate reasons, including where two people are in a relationship but do not live together."
The lockdown follows confirmation of positive COVID-19 cases at schools in Maitland and Lake Macquarie, as well as an exposure at University of Newcastle's Auchmuty library.
Five people have been confirmed to have COVID-19 in the Newcastle area, including four cases notified after 8pm on Wednesday. Close contacts of all confirmed cases are being tested and will isolate for 14 days, NSW Health said.
"While the source of infection for these cases continues to be investigated, we now know of a gathering on Blacksmith Beach [Lake Macquarie] on Friday night, which is believed to be the source of infection for cases in the area."
NSW has recorded 262 cases in the past 24 hours.
Of those cases, 45 infectious were infectious in the community, while five people have died in the same period; three in their 60s, one in their 70s, and one in 80s.
Dr Kerry Chant said five people were being cared for in the Hunter and investigations were underway.
NSW Police will continue to manage traffic congestion around COVID-19 testing sites in Newcastle, the Hunter and Lake Macquarie due to an increase in testing demand.
"There are significant traffic delays around testing clinics in Morisset, Warners Bay and Maitland, there are also delays near the University of Newcastle's Callaghan campus drive-thru testing site," police said.
"Please be aware that testing sites will never be closed due to demand, police are required to maintain a flow of traffic to avoid major disruption on surrounding local roads."
To find a COVID-19 testing clinic, go to: www.nsw.gov.au/covid-19/health-and-wellbeing/clinics