Dozens of evacuation orders still in place around the state could be removed on Friday, allowing many residents to return home.
A forecast for 600 gigalitres of water to spill over the dam wall daily has been been revised down to between 300 and 350 gigalitres.
However, the BOM said flooding was still expected at Windsor, as the Hawkesbury and lower Nepean rivers continue to rise.
And people in the eastern part of Wisemans Ferry, 75km north west of Sydney, were on Friday morning told to get ready to evacuate properties around the town centre in the next few hours.
Further north, the Richmond River delivered major flooding at Coraki, Bungawalbyn and Woodburn on Thursday, with peaks near the record March 1974 flood level, but Casino and Kyogle fell back below the minor flood level.
The SES responded to more than 2,500 requests for assistance and conducted 144 flood rescues in the 24 hours to 5pm on Thursday.
Another cold front on the way from Victoria will bring more rain and severe weather on Saturday, the BOM said, which could cause rivers to start rising again.
The death toll from the NSW floods event remains at five, including four fatalities in the north western town of Lismore.