The Hunter region will go into lockdown at 5pm on Thursday after five cases of the COVID-19 delta strain were detected in the community.
Two Maitland Christian School students and three people in their 20s have tested positive for the virus.
It comes after a "very high viral load" was found in sewerage in Shortland, Merewether and Belmont on Monday.
Testing clinics in Maitland have been swamped as residents rush to get tested. There were long queues for testing on Wednesday and also on Thursday after the cases were announced. At one point the line extended to Stockland Greenhills.
Health authorities believe a gathering on a beach at Blacksmiths on July 30 is the source of the infection. Since that gathering a Central Coast man in his 30s has also tested positive.
Dr Kerry Chant said testing around one of the positive cases led to the two students at Maitland Christian School testing positive.
All of the students were sent home on Thursday and told to isolate at home and wait for further health advice.
The Maitland, Port Stephens, Cessnock, Dungog, Newcastle, Singleton and Muswellbrook local government areas are all part of the lockdown and residents must comply with the same restrictions as Greater Sydney.
That means people are not allowed to leave their home unless it is for essential shopping, medical treatment, exercise or on compassionate grounds.
People should only leave home for work if they cannot work from home.
Students are not allowed to go to school and will revert to online learning.
The lockdown is expected to end at midnight on Thursday, August 12, although that will be dependent upon case numbers.
NSW Premier Gladys Berejiklian announced the snap lockdown on Thursday, saying she hoped it would quickly curb the number of cases.
Two Maitland Christian School students have tested positive for COVID-19, NSW Health has advised.
Parents were directed to collect their children from the school immediately.
The school is closed and will undergo a deep clean.
It comes as a "high virus load" was detected at Shortland, Merewether and Belmont.
There were long queues for testing at East Maitland on Wednesday, with more demand for testing expected today.
More to come.