Premier Berejiklian said at the time NSW would not be hasty in reintroducing recreational trips to regional communities, but that the situation was being closely monitored.

The lifting of the ban will come as relief to struggling regional tourism operators, who have been hit by the twin disasters of both the bushfires and the coronavirus lockdown. 

The Government’s announcement follows the relaxation of some restrictions from last Friday, including the permitting of up to 10 customers dining in cafes, restaurants and pubs.

There have been no limitations on travelling within NSW for work, school, exercise or visiting family and friends, but holidays and leisure trips have not been allowed.

Ms Berejiklian had said she opposed her counterparts' border closures and wanted travel restrictions scrapped.

"I often joke with the Queensland Premier that I'll end up going to Auckland before I go to Brisbane if we continue the way we are going," she said.

But with borders still being closed NSW residents will at least now be able to take holidays within the state.

Payroll data from the Australian Taxation Office, analysed by the Bureau of Statistics (ABS) revealed the heavy toll the lockdown is having in regions where tourism and hospitality are among the primary employers.

Other coastal holiday destinations, including Port Macquarie, were severely affected.

Up to 21,000 out of a population of just under 100,000 people in the Shoalhaven could be out of work by the June quarter, says an economic expert from the University of Wollongong.

The city, which relies on tourism as one of its main industries, was hit first by bushfires in its peak summer season and now by the impact of coronavirus.

Associate Professor Martin O'Brien, from the University of Wollongong's faculty of business, said he would not be surprised if the number of unemployed people in the region doubled, and that would be a conservative estimate.

"Even if it does get up to 20 per cent, there will still be a lot hidden behind the statistics," Professor O'Brien said.