Health authorities are working with the operators of the Majestic Princess cruise ship that has docked in Sydney Harbour with hundreds of people infected with COVID on board.
New South Wales Health has confirmed the cruise ship is at the highest COVID alert possible for those on board with a Tier Three warning.
That means at least 20 per cent of people who were on board for the cruise have COVID.
The ship has more than 3,000 passengers and 1,000 crew, with several hundred believed to be infected.
Many passengers disembarked from the ship on Saturday after testing negative to the virus.
The president of cruise operator Carnival Australia, Marguerite Fitzgerald, said there were about 800 people infected, who were mostly passengers.
"This is a 12-day voyage and we started to see elevated cases about halfway through," she said.
Ms Fitzgerald said the infected guests are mild or asymptomatic, and have been isolating in their rooms.
"Reflective of the increase in community transmissions, we too have seen more guests test positive for COVID-19 on the current voyage of Majestic Princess. This is a result of mass testing of our 3,300 guests," she said.
The company said it had been proactively preparing for COVID-19 incidents and was working closely with NSW Health.
It comes as the state sees a sharp spike in the number of COVID cases.
Chief Health Officer Kerry Chant on Friday warned NSW had entered its fourth COVID-19 wave, with 19,800 cases detected in the seven days to 4pm on Thursday.
It was a jump of 7,350 cases on the week before, when 12,450 cases were detected in NSW.
NSW Health said in a statement that all COVID-positive people onboard were isolating and being cared for by the staff medical team.
"NSW Health's assessment is that the COVID-19 risk level for the Majestic Princess is now Tier 3, which indicates a high level of transmission," it said in the statement.
"Carnival has advised NSW Health that they are assisting passengers with COVID-19 to make safe onward travel arrangements."
One man leaving the ship said he thought the cruise operator had done a good job with protocols, but passengers were not listening to instructions.
"It was scary because we heard about it [the infections] but we tested negative, and the Princess Majestic were really good with the protocols," he said.
"We wore masks for the last seven days and we were very careful when we went ashore, so some people don't just listen. Obviously they didn't [follow the rules] and that was the problem, people just don't take COVID seriously."
Another passenger praised the crew and said the cruise was enjoyable.
"Fantastic, no problems. The crew were terrific, and we've had a great time," he said.
"You've got to accept that this is how it's going to be, and no we thoroughly enjoyed it."
Carnival said all positive cases would be separated from other guests when they disembark the ship.
"We understand this current wave of COVID-19 is concerning to many in the community and we take our responsibility in keeping everyone safe very seriously," it said in a statement.
"All guests disembarking have undertaken a rapid antigen test in the past 24 hours, which will determine how they will disembark the ship.
"All guests will be masked, regardless of COVID status."
The Opposition said while the situation was delicate it would not be calling for restrictions.
"No, I'm not calling for that [restrictions], I think that the advice from Kerry Chant [NSW Health Chief Officer] this morning was wise," leader Chris Minns said.
"Let's manage this situation using the expert advice and expertise of our chief health officer ... I've got confidence in them to navigate through a tricky situation."
