NSW Premier Gladys Berejiklian was "extremely concerned" as the state's Covid outbreak took a worrying turn on Saturday, with 466 new positive infections.
What the lockdown means for the border bubble remains unclear, but a border bubble permit system is now being enforced by Victorian health authorities.
"The nature of Delta is something we haven't seen before and is spreading in a way we haven't seen before," Ms Berejiklian said.
"If we want to stop the spread, we need to get vaccinated.
"Vaccination is key. Don't wait."
NSW Chief Health Officer Dr Kerry Chant said the lockdown would remain until at least 12.01am on August 22.
"Everyone must stay at home unless they have a reasonable excuse to leave. They also cannot have visitors in their home from outside their household, including family and friends," Dr Chant said.
"People still can have one visitor at one time to fulfil carers' responsibilities or provide care or assistance, or for compassionate reasons, including where two people are in a relationship but do not live together.
"All hospitality venues must be closed to the public, including pubs, restaurants and cafes, except for takeaway."
Retail premises are required to close except for: supermarkets and grocery shops, shops that predominantly sell food or drinks (eg butchers, bakeries, fruit shops and delicatessens), but does not include restaurants or cafes, chemists and pharmacies, kiosks shops that predominately sell office supplies, pet supplies, newspapers, magazines and stationery, alcohol, maternity and baby supplies, medical or pharmaceutical supplies, food and drink premises, but only to sell takeaway, cellar door premises, but only to sell takeaway, hardware and building supplies, landscaping material supplies, rural supplies, timber yards, garden centres and plant nurseries, vehicle hire premises, not including the premises at which vehicles are sold, shops that predominately carry out mobile phone repairs.
Service stations, banks, post offices, laundromats and drycleaners can remain open.
Dr Chant said anyone who leaves their home must carry a mask with them at all times.
They must be worn when working outdoors, by all school staff, by all people in outdoor markets, outdoor shopping strips, and in an outdoor queues waiting for products such as coffee and food.
"Every employer across NSW must require their employees to work from home unless it is not reasonably practicable," Dr Chant said.
It is a reasonable excuse to leave your home for work - but only if it is not practicable to work from home.
There will be a one-day grace period for planned weddings and funerals in the regional areas that have not already been subject to a lockdown.
Those events may go ahead until 12.01am on August 16, but only with guests from areas that have not already been subject to a lockdown.
From Monday, small funerals and memorial services of 10 persons only (excluding the persons conducting the service) will be permitted.
NSW Health urged people to continue to present for testing with even the mildest of cold-like symptoms.
NSW Police Deputy Commissioner Michael Willing warned "some of the strongest laws, some of the strongest police action coming. I am not apologetic".
"While the vast majority of people are doing the right thing, too many are not and that will have devastating consequences because the Delta variant leaves no room for error," he said.
"We are doing everything we can to reduce your stress but we are also asking you more than ever before to protect yourself and your loved ones.
"These high rates of cases day-on-day in the last week have demonstrated that the virus is circulating in higher numbers than we have ever seen in Australia before."
