"Fragments of the virus that causes COVID-19 have been detected in the sewage system at Burwood Beach Sewage Treatment Plant, following a sample taken on 21 April", NSW Health said on Twitter.
According to the authorities, the two other reported cases were at the Allambie Heights sewage network, which serves around 83,400 people in the Northern Head catchment, and the Merimbula sewage treatment plant, which serves approximately 15,000 people on the South Coast.
"These positive sewage results may indicate the presence of people who have recently recovered from COVID-19, as they can continue to shed fragments of the virus for several weeks after recovery", the health authorities warned.
The Burwood Beach Sewage Treatment Plant servers around 225,000 people and reaches Newcastle as well as some surrounding suburbs.
The NSW Health expressed concern that the findings could signal that there were some undetected cases in the community and had asked people residing in these areas to be alert of any symptoms which could indicate a COVID-19 infection.
Over the past 24 hours, only one new overseas acquired case and no new local cases have been registered in NSW. According to the health authorities, 7,706 COVID-19 tests have been conducted over the same period.