Premier Gladys Berejiklian is "encouraging" parents to keep children home even though schools will remain open.
"Schools in NSW from tomorrow will remain open," Ms Berejiklian said on Monday morning.
"The health advice has not changed.
"However, for practical reasons, in NSW we will be encouraging parents to keep their children at home to ensure there is one single unit of teaching.
"Already last week, we had 30 per cent parents who chose to keep their children at home.
"We anticipate and appreciate that number will increase."
Ms Berejiklian stressed that "for parents who have no option, the school is safe for children to attend."
"No child will be turned away from school," she said.
In relation to the shutdown of non-essential services, Ms Berejiklian said specific details would be given on the website nsw.gov.au about which venues will no longer be able to operate in a normal way from noon today.
"If your business, your industry is not on that list, you can continue to operate.
"However, we do recommend, where possible, people work from home to reduce the social interaction, to ensure that social distancing is respected and maintained."
Hotels, clubs, cinemas, gyms, indoor sporting venues and churches are among non-non essential services that will close from midday today (Monday) under strict new coronavirus measures.
Cafes and restaurants will be restricted to takeaway.
Contrary to earlier indications, NSW schools will stay open at least to the end of the term, but parents will have the choice to keep children at home.
Schools in Victoria will bring forward Easter holidays and close on Tuesday, but Prime Minister Scott Morrison said it had been agreed they should reopen after the break
Speaking after the national cabinet meeting on Sunday night, children "should go to school tomorrow" and for the remainder of the school term in all states and said there was "no change" to the health advice from authorities.
"I don't want to see our children lose an entire year of their education," he said.
"This is very serious. Early childhood education is incredibly important, as are all years of education."
Mr Morrison said parents had the right to keep their children at home but schools would remain open should they send them.
"Parents who make the decision to have their children stay at home, must taken responsibility for their children," he said.
Chief medical officer Brendan Murphy said members of the expert medical panel had reaffirmed its position that the risk to children of coronavirus was "extremely low".
"We've had hardly any cases in primary school children and the international experience is that it is a very, very low risk of symptomatic infection," he said.
Schools are expected to close from Tuesday and childcare centres and preschools may follow as part of a shutdown of non-essential services in NSW.
Premier Gladys Berejiklian announced the shutdown of non-essential services, including cafes, restaurants, clubs and pubs, and said she would have more to say about schools on Monday after tonight's national cabinet meeting.
A government source told The Sydney Morning Herald the schools plan was still being developed, but was expected to be similar to that in Britain, where some schools have continued to operate to cater for the children of essential workers.
"The NSW plan is also likely to accommodate vulnerable children," the Herald reported. "The closure is likely to extend to child care centres and preschools."
Premier Gladys Berejiklian has announced a comprehensive shutdown of non-essential services in NSW, which could include schools closing from Tuesday.
Restaurants, hotels and clubs will be forced to close in NSW.
Ms Berejiklian released a statement on Sunday ahead of tonight's national cabinet phone hook-up where, along with Victorian premier Daniel Andrews, she will reportedly push for school closures.
"Tonight I will be informing the national cabinet that NSW will proceed to a more comprehensive shutdown of non-essential services," Ms Berejiklian said.
"This will take place over the next 48 hours.
"Supermarkets, petrol stations, pharmacies, convenience stores, freight and logistics, and home delivery will be among the many services that will remain open.
"Schools will be open tomorrow, though I will have more to say on this issue in the morning.
"I will update NSW tomorrow morning about the impacts and our plans following the national cabinet."
Prime Minister Scott Morrison said at his press conference earlier on Sunday the schools issue was expected to be discussed at tonight's meeting, which has been brought forward from Tuesday at the request of NSW and Victoria.
However, Mr Morrison said closing schools would "seriously impact and disrupt the health workforce that is needed to save lives".