Millions of people in a 1000-kilometre stretch of Australia's east coast have been warned to expect flooding, road closures and landslides as heavy rain continues on Friday.

The Bureau of Meteorology issued a severe weather warning on Friday morning for the coast from the south of Wollongong up to Lismore in NSW's north.

Sydney, Wollongong and Newcastle could all be affected by flooding, the bureau said.

The weather bureau's warning came after downpours on Thursday night brought heavy rain and flooding to much of the state. The heaviest falls have been on the NSW north coast, with several areas recording more than 200 millimetres by Friday morning.

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Heavy rain is setting in across a broad area of eastern NSW, prompting a mix of joy and concern. Photo: NSW Bureau of Meteorology

In the 24 hours to 9am on Friday (ADST), Byron Bay had 266 millimetres and Coffs Harbour had more than 165 millimetres.

"What we're going to expect today is that rainfall to shift further south," BOM forecaster Gabrielle Woodhouse said.

"We'll start to see the focus of that rain through southern parts of the mid-north coast, Hunter and then into Sydney and Illawarra going into tonight."

Penrith is forecast to receive up to 100 millimetres on Friday and up to 150 millimetres on Sunday. Sydney can expect up to 90 millimetres on Friday and Saturday.

Significant falls were also predicted over Sydney's main drinking water catchments, which are at just 42 per cent capacity.

The NSW State Emergency Service said it had received nearly 340 calls for assistance across the state since the rain started.

Most were related to water over roads, roof damage and downed trees.

"We've got our rescue crews right up and down the coast because we know this event will really go border to border," SES Assistant Commissioner Paul Bailey told the ABC.

"We put crews in those areas where we traditionally have problems with people driving into flood waters."

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Heavy rain is forecast for the area shaded in yellow. Image: BOM

The road to the Jenolan Caves, south-west of Katoomba, has already been closed due to fears the heavy rain could cause landslides.

"There are also a significant number of loose rock fragments, which have an increased likelihood of rolling down the slope and on to the road," a Transport for NSW spokesman said.

"Given current weather forecasts are predicting heavy and prolonged rainfall in the area over the coming days – the first in the area since the bushfires – it is essential for safety reasons that the road is closed until it can be assessed safe for traffic."

Several roads north of Sydney were closed due to flooding on Friday morning, and trains on the T1 North Shore line were delayed due to a fallen tree branch.

Buses also replaced ferries between Parramatta and Rydalmere because the Parramatta Weir was overflowing.

NSW Maritime executive director Mark Hutchings said conditions were also dangerous out at sea.

"Skippers and owners of small boats should be on high alert and check the conditions before considering crossing a coastal bar or heading offshore," he said.

The NSW Rural Fire Service said the heavy rain was welcome in bushfire-ravaged parts of the state.

"We were over the moon to see rain arrive across many parts of NSW, with decent falls in the state's north," the RFS said on Thursday night.

-with agencies