NSW will ease a host of restrictions on indoor and outdoor gatherings, plus scrap compulsory face masks in shops, as it notched up 10 consecutive days without a new local COVID-19 case.

The state recorded zero local COVID-19 cases in the 24 hours to 8pm on Tuesday, as well as two cases in travellers in hotel quarantine.

Premier Gladys Berejiklian on Wednesday afternoon announced that gathering and function restrictions would ease from Friday.

NSW residents could invite up to 30 people inside their homes, while picnics and other outdoor gatherings - including in yards - can number 50 people.

Attendee caps at weddings and funerals have been lifted to 300 people, while caps have been removed altogether on corporate events, religious gatherings and hospitality venues. However the "four square metre" rule still applies.

Ms Berejiklian said restrictions limiting venues to one person per four square metres may be revised to two square metres in a fortnight.

"We have the most robust quarantine system in Australia but we know that there's no such thing as a perfect system, and the risk of an outbreak is there," Ms Berejiklian said.

"We need to make sure that if one does occur, that we don't create a super-spreading event."

Rules on mask usage around Greater Sydney would also change, with usage no longer mandatory in retail settings.