NSW brought in the new year in a somewhat subdued fashion, heading into 2022 with a reduced crowd watching its iconic fireworks displays on Sydney Harbour.

The sky exploded with colour at midnight to ring in the new year and end the state's third consecutive day of record high coronavirus cases.

While crowds exceeding one million people were the norm in years gone by, organisers expected reduced numbers in the context of the latest outbreak.

NSW Tourism Minister Stuart Ayres said on Friday fewer people would be out and about on New Year's Eve, instead "taking personal responsibility for their own health and making those conscious decisions to stay home".

About 17,000 tickets had been issued to watch from one of six City of Sydney vantage points.

The fireworks began with the 9pm Welcome to Country, curated by Koori artist and creative consultant Blak Douglas, followed by a performance featuring local First Nations musicians Barkaa and Dobby that ended with Sydney Lord Mayor Clover Moore being handed a message stick.

Tickets remained available as the night wore on, while others looked on from the balconies of nearby apartment buildings and hospitality venues as well as vessels on the harbour.

Those who turned up on an otherwise ideal 22C summer night were treated to displays that lived up to the lord mayor's earlier promise.

More than 80,000 pyrotechnics and 25,000 shooting effects requiring 60 tonnes of equipment to launch were sent into the sky under the experienced guidance of Fortunato Foti, who celebrated his 25th year at the helm of the fireworks display.

Sydney electronic music duo the Presets soundtracked the scene as fireworks launched from the Sydney Harbour Bridge, the sails of the Opera House, and barges on the harbour.

The display culminated with the iconic "waterfall effect" that cascades fire from the bridge down to the water while fireworks continued surging into the sky above.

While attention was focused around the harbour, it wasn't the only place to catch some pyrotechnics in the centre of Sydney on New Year's Eve.

A considerably smaller number of fireworks could be seen exploding just above Prince Alfred Park at Surry Hills about 11pm, lacking the pizzazz, and likely the appropriate permits of the harbour spectacle.

NSW Police said people were generally well behaved across the state.

A total of 128 arrests were made, including 10 in the Sydney CBD with three Criminal Infringement Notices and one Field Court Attendance Notice issued.

"I would like to thank those members of the community who made their plans COVID-safe and celebrated the beginning of 2022 responsibly, in what we hope is a better year for everyone," said Assistant Commissioner Peter Thurtell.

Australian Associated Press