WaterNSW said multiple dams reached capacity last night.
Warragamba Dam in western Sydney has started to spill after days of heavy rain.
WaterNSW said the dam reached capacity at about 10.35pm last night, along with several smaller Sydney dams.
"Based on forecasting by the Bureau of Meteorology and modelling by WaterNSW it is estimated that the spill rates will peak this morning at a rate of approximately 60GL/day," a spokesperson said.
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The NSW SES is working with WaterNSW and the Bureau of Meteorology to monitor the spill, however the government agency does not expect any further significant flooding downstream.
The spokesperson said Cataract, Cordeaux, Avon, Nepean and Woronora also started to spill as a result of the rain across their catchment areas.
Fitzroy Falls, Tallowa, Greaves Creek and Medlow dams were already spilling at the time.
The NSW State Emergency Service said the rain has started to ease and move offshore with conditions expected to ease over the next two days.
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However gusty and windy conditions continue along the state's coastal fringe and into the northern tablelands.
The NSW SES currently has 32 warnings in place, including four emergency warnings in the Wamberal and North Entrance areas, where 30 properties have been impacted by coastal erosion.
There are still concerns for parts of the Sussex Inlet area on the NSW South Coast due to the community becoming isolated after the heavy rain.
Minor flood warnings remain in the Richmond, Liverpool and Camden areas.
NSW SES crews are keeping an eye on river catchments and lake systems due to water rising in some areas.
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Emergency warnings have been downgraded in some areas where the water has receded, including Sanctuary Point and Burrill Lake in the Shoalhaven region.
Strong winds are expected on the coast today, with warnings in place for the Macquarie, Hunter, Sydney, Illawarra, Byron, Coffs, Batemans, and Eden coasts.
The Bureau of Meteorology has also issued flood warnings for the Hawkesbury, Nepean, Shoalhaven, Peel, and Snowy rivers, as well as Lake Macquarie and the St Georges basin.
More than 2000 NSW SES volunteers and emergency partners have worked hard to respond to more than 4000 incidents.
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