Premier Gladys Berejiklian said from Monday, up to 20 people can attend weddings, 50 at funerals and 50 at places of worship, subject to the four square metre rule.
"We know how important these services are to individuals and families but as we ease restrictions further, we must remember to keep one another safe," Ms Berejiklian said.
"It is crucial that worshippers remember to follow health advice. This is particularly important for people with co-morbidities aged over 50 and people aged over 70."
Health Minister Brad Hazzard said extensive COVID-19 outbreaks in places of worship and amongst choirs’ overseas highlights why the NSW Government has been cautious in easing restrictions.
"Sadly, we have seen many congregations of different faiths and denominations affected by COVID-19 overseas," Mr Hazzard said.
"NSW Health has developed a checklist to help places of worship create a tailored COVID-19 Safety Plan to ensure they can keep participants as safe as possible.
"These safety plans cover topics such as physical distancing measures, hand hygiene and extensive cleaning measures, it is also vital that people who are unwell stay at home."
NSW Chief Health Officer Dr Kerry Chant said while people would be familiar with many general measures in the plan, others are more specific to places of worship.
"Places of worship will be asked to find alternatives to practices that might spread the virus like singing, sharing books and even passing around the collection plate to reduce infection risks," Dr Chant said.
"Communal singing and chanting should not occur because of the high risk of transmission of the virus. Instead, measures such as one singer standing at least three metres away from others would be safer."
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Learn more about what you can and can't do under the current rules.