Near misses of Sydney's new trams by motorists and cyclists have prompted the state government and police to warn people to "ditch the distraction, follow the road rules and pay attention" as testing along the light rail line ramps up.

The warning came as a tram reached the end of the 12.7 kilometre line at Circular Quay for the first time on Tuesday, completing the wire-free section of George Street in the CBD.

The government released footage on Tuesday showing motorists and cyclists cutting directly in front of trams, in flagrant disregard of traffic signals. In one incident, a car drove along a section of the line directly beside a light rail stop at Randwick.

Transport Minister Andrew Constance said the arrival of the first tram at the northern end of the light rail line signalled the start of regular testing on George Street from Town Hall to Circular Quay at night, ahead of day-time testing in the CBD within weeks.