Health Minister Brad Hazzard today told a NSW budget estimates hearing the BA2 sub-variant, thought to be more infectious than the BA1 lineage, was becoming the dominant Omicron offshoot.
Hazzard said preliminary data from the University of NSW (UNSW) indicated cases could "more than double" within six weeks.
"It's very preliminary and we need to do a lot more digging ... but we are concerned at this point that BA2 is amongst us and overtaking BA1," he said.
There were 16,288 cases recorded in NSW today, the highest figure since 27 January.
The health minister said he was concerned the lagging uptake of boosters shots in the community, which sits at just over 56 percent, showed the public had "switched off" from the virus' threat.
"We're still sitting way off, way off the booster doses that we need through the community," Hazzard said.
"People need to understand that while the community has gone to sleep on the virus, the virus hasn't gone to sleep on the community.
"The virus is still out there and it can wreak havoc if we don't go and get our boosters fast."
BA2, known as the "stealth" variant, has been circulating in Australia since late January.
A rise in case numbers was expected in NSW after restrictions, including mask rules, were eased on 25 February.
On 17 February, the day Premier Dominic Perrottet announced the rules would be rolled back, he said a spike in infections should not be seen as "a measure of success or failure".
Marianne Gale, the state's deputy chief health officer, today said increased socialising, major events and a reduction in mask wearing played a role in higher Covid-19 numbers.
Dr Gale said evidence from overseas had shown BA2 could rapidly overtake BA1 as the dominant sub-variant.
It is believed BA2 is more infectious but it is unknown whether it is more severe, Dr Gale said.
"The preliminary and early projections from the team at UNSW ... do show that we are likely to see an increase in case numbers through March, to April and May," she said.
"We don't know exactly how high the peak may be, how long it may last, [or] exactly when it will come."
Four people died from Covid-19 in the state in the latest reporting period, while 991 people are in hospital.
Of those, 39 were in intensive care and 14 required ventilation.
"There are people dying every day from Covid-19, there are many people in our hospitals," Hazzard said.
"And we are genuinely concerned and worried about what we're seeing."
Over in New Zealand, officials also confirmed they are seeing a growing proportion of BA2 variant cases in their ongoing Omicron outbreak, which today recorded 21,015 new community cases.