The Gospers Mountain mega blaze, which is a combination of several fires, across nearly 300,000 hectares is just an hour's drive from the nation's most-populous city, the BBC reported.
People who can not defend their property from approaching fires have been told they should leave immediately.
Thousands of tired firefighters, who have been battling bushfires for a month, were on Saturday fighting almost 100 blazes in New South Wales state.
About 500 homes in coastal communities located about 350 kilometers south of Sydney lost electricity due to fires and repairers could not begin to restore electricity until they reached the end of the year. the area is declared safe, Energy supplier Endeavor Energy said in a tweet.
New South Wales Rural Hearth Service (RFS) deputy commissioner, Rob Rogers informed ABC: "We cannot cease these fires, they'll simply hold burning till circumstances ease, after which we'll attempt to do what we are able to to include them".
The New South Wales Rural Fire Service (RFS) said in a tweet that "a number of fires in the Hawkesbury, Hunter and Central Coast areas have now joined".
The north Sydney blaze was sending black fumes throughout town, inflicting an increase in medical issues.
Rural Fire Service Commissioner Shane Fitzsimmons said the worst might still be ahead, with temperatures forecast to rise into the 40 degrees Celsius (104 Fahrenheit) in coming days and no meaningful rainfall expected until late January.
Some firefighters have expressed concern that volunteer numbers might not be enough and that there are inadequate water supplies.
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Since October, bushfires have killed six people and destroyed more than 700 homes throughout Australia.
Aerial footage captured a "firenado" that formed on Saturday in the Bundamba suburb of Ipswich, Queensland, shows what is one of the more than 100 fires now raging across eastern Australia.
The fires around Sydney have been pumping such vast amounts of smoke into the air that they appear as significant rain on the radars, the Bureau of Meteorology said on Twitter.
The total area burned by these fires was about 335,000 hectares or 830,000 acres, the RFS added.
Hundreds of bushfire survivors and farmers converged on the nation's capital, Canberra, this week in protest.
The season has hit earlier than normal and has been exacerbated by drought conditions.
Final week, the bureau famous that NSW had endured its driest spring season on report.
The federal government has been criticised over its efforts to handle local weather change. One woman displayed the charred remains of her home outside Parliament - on which she had written: "Morrison, your climate crisis destroyed my home".