The New South Wales Rural Fire Service (RFS) said it was concerned that flying embers could spark new blazes ahead of the advancing fire front.
Some residents have been instructed to seek shelter as evacuation is now too dangerous.
Recent weather in south-eastern Australia has been unseasonably hot.
Shane Fitzsimmons from the RFS said the fire was behaving "very aggressively".
Strong winds have been pushing the flames north and east towards suburban areas.