NSW Premier Gladys Berejiklian has fast-tracked the implementation of Level 2 water restrictions in Sydney, the Blue Mountains and the Illawarra regions as dam levels deplete faster than expected.

The new restrictions take effect from December 10 and apply to water use outside the home, with people required to use buckets when watering their gardens and washing their cars.

Premier Gladys Berejiklian announces the new rules on Thursday. Credit:Christopher Pearce

Ms Berejiklian said the "rapid rate of decline of our dam levels" had prompted the government to bring forward the Level 2 restrictions, which are typically enacted when dam levels drop to 40 per cent.

"We are in uncharted territory in terms of the rate at which [water] has been declining. In fact, in the last 12 months we only received 10 per cent of the water in our dams that we ordinarily would," Ms Berejiklian said on Thursday.