New South Wales has reported a new record of cases, with 681 recorded and one death, while Victoria has reported 57 new local cases.
NSW Premier Gladys Berejiklian reported the figures this afternoon. A man in his 80s died from the virus.
She also announced the Covid-19 lockdown affecting NSW's regional areas has been extended until 28 August. It had been due to finish this weekend.
These following areas were generating the vast majority of cases, Berejiklian said.
They are Merrylands, Guildford, Auburn, Granville, Lidcombe, Greenacre and Blacktown.
There are 474 people in NSW hospitals, 82 of those in intensive care.
NSW Deputy Chief Health Officer Dr Marianne Gale said 25 cases are currently requiring ventilation.
Of the 82 cases in ICU, 71 are not vaccinated.
The situation in western New South Wales is "deeply concerning to us", Dr Gale said.
There have been 25 new cases of Covid-19 reported to 8pm last night in western New South Wales, bringing the total at the Local Health District to 167.
"We ask all of the population of western New South Wales to really be very vigilant for symptoms, to come forward for testing," she said.
"We are concerned about three cases overnight, notified in Wilcannia.
"Those cases will be included in the numbers tomorrow.
"We are very concerned about the risk of community transmission in Wilcannia, and we call on anyone who has been in or near Wilcannia in recent days to please get tested."
Berejiklian said NSW is "learning to live" with the Delta strain and said life would "feel much better" once vaccination rates increased, with a record 110,000 jabs administered in the last 24 hours.
She said 5.5 million vaccinations had now been administered in NSW, with 53 per cent of the population having their first jab.
Despite record cases, Berejiklian remained positive despite the high number of cases.
"The next few weeks will be hard, but no doubt that once we get those high vaccination rates life will feel much better, it will look much rosier," she said.
"I appreciate what we are going through looks difficult but every state in Australia will need to come to terms with the fact that when you get to a certain level of vaccination and open up, Delta will creep in.
"We can't pretend that we will have a zero cases around Australia with Delta.
"As the Doherty report says, once you get to 80 per cent double dose and you have to open up, everyone will have to learn to live with Delta.
"In New South Wales, we are learning that earlier than others."
Victoria records 57 new cases
Meanwhile, Victoria has recorded 57 new locally acquired cases, 44 of whom were quarantined while infectious.
Victoria processed 49,607 test results on Wednesday and delivered 27,581 vaccine doses at state-run sites.
There are nearly 15,000 primary close contacts in quarantine, and Health Minister Martin Foley yesterday foreshadowed a jump in numbers as people returned their day-13 tests.
Authorities are increasingly concerned by the number of mystery cases being identified around St Kilda, Middle Park and Caulfield, in Melbourne's inner south-east.
"We're really encouraging anyone who lives, works, or visits or actively uses that St Kilda area to please consider coming forward to get tested," Covid-19 response commander Jeroen Weimar said on Wednesday.
"We are exceptionally concerned about what we don't know yet in that area."
There are more than 550 exposure sites, including supermarkets and essential stores from across Melbourne added in the past 24 hours.
Victoria's testing rate has continued to climb, exceeding the 40,000 benchmark previously flagged by Foley.
Victoria's daily testing record is 59,355 tests, set during the last lockdown.
The state government has launched a campaign with the tagline "only a test can tell", in a bid to encourage Victorians not to let mild symptoms pass by without a Covid-19 test.
Premier Daniel Andrews has said while vaccines are the long-term path out of heavy restrictions, only sustained high testing rates will get Melbourne out of its current outbreak.
Victoria may need to ditch Covid-zero strategy if lockdown fails, expert warns
University of Melbourne epidemiologist Tony Blakely said if the current lockdown failed, Victoria would need to have a conversation about abandoning the goal of Covid-zero.
Supermarkets and essential shops across Melbourne and a tram route in St Kilda are among more than 550 exposure sites now listed in Victoria.
Professor Blakely, whose modelling helped inform the roadmap out of Melbourne's extended lockdown last year, said he agreed with tightened restrictions because the previous settings were not "tipping the balance".
"However, if in two weeks' time, we haven't got to that position where all the cases are occurring amongst people already in quarantine, if we're still seeing mystery cases at that point … I don't know if we could cope with that level of draconian lockdown for much longer," he told ABC Radio Melbourne.
Blakely said if the virus was still circulating after 2 September, there needed to be a "serious discussion" about loosening restrictions and abandoning the goal of Covid-zero.
"We're not ready to make that decision," he said.
"But certainly, trying it for another two weeks. One more heave-ho, another 14 days on top of the 200 and see if we can get back to an elimination state and stay in that state until the vaccination coverage is much higher around November."
Footscray Hospital worker tests positive
Dozens of healthcare workers have been sent into quarantine in Melbourne's west, after a medical imaging technologist at Footscray Hospital tested positive on Tuesday.
In a statement, Western Health said it was not yet clear how the staff member, who worked on Monday, was infected.
The service said contact tracing investigations were continuing.
"All patients who attended appointments during the potential exposure period are being contacted, and 39 Western Health staff have been quarantined," a Western Health spokesperson said.
"Western Health has strict Covid measures in place, including the requirement for all staff to wear N95 masks and eye protection in all clinical areas of our hospitals."