Close contacts of COVID cases at schools will no longer need to isolate, density limits will be scrapped and mask rules will be relaxed further, the NSW government has announced after tweaking the next stage of restrictions.

Rules to limit the spread of the coronavirus will ease again when NSW reaches 95 per cent double vaccination or on December 15, whichever comes first.

That’s when the lockout of unvaccinated people will end and mandates on mask use will stop in most settings.

NSW had another 261 local coronavirus cases on Friday, down from 276 on Thursday. There were no more fatalities, for the second consecutive day.

NSW still has 185 COVID patients in its hospitals, including 27 in intensive care.

The state government’s COVID-19 cabinet subcommittee met on Thursday to consider extending the use of masks in retail beyond December 15, but instead decided to relax the rules further.

Masks will be required only on public transport, planes and airports and for indoor front-of-house hospitality staff who are unvaccinated.

Under the previously announced rules, all indoor hospitality staff were require to wear masks.

Density limits won’t apply any more either, where previously venues were limited to one person per two square metres.

QR check-ins will also be scrapped in many settings.

Only high-risk venues – including hospitals, aged and disability care facilities, gyms, places of worship, funerals or memorial services, salons, pubs and clubs – will require them.

Premier Dominic Perrottet said the restrictions were tweaked thanks to the incredible take up of the vaccine.

Across NSW, 92.1 per cent of people 16 and over are fully vaccinated and while most teenagers – 75.9 per cent – have also had two jabs.

“The easing of these restrictions will allow people to get out and enjoy summer providing a boost for some of our hardest industries as we do everything we can to ensure we keep people safe as we learn to live with COVID,” Mr Perrottet said.

The government also announced changes to requirements for close contacts of COVID cases in schools across the state.

From Monday, they will no longer need to isolate for a full seven days.

Students who are close contacts of a positive case will be required to get a PCR test as soon as possible after being notified of exposure.

If it is negative, they may return to school immediately, so long as they provide negative rapid antigen home test results for the next seven days.

Education Minister Sarah Mitchell said the government was excited that the changes would mean less disruption in schools.

“I’m delighted we can reduce the disruption for students and families, while still maintaining the safety measures for students and staff on school sites,” she said.

However, mask settings in schools will remain the same, meaning they are required for all staff and high school students and recommended for primary students.

Meanwhile, unvaccinated year 12 students have been granted an exemption to attend formals, dinners, or graduations, if they abide by the public health requirements of the venue they’re attending.

Health Minister Brad Hazzard said the 2021 cohort “had an incredibly tough 18 months”.

“They deserve to be able to party with their friends and enjoy one of the biggest celebrations of their life,” he said on Thursday.

A COVID case at a backpacker hostel at Byron Bay has concerned authorities, with the facility placed into a week-long lockdown, days before thousands of celebrating school leavers are due to arrive in the region.

-AAP