The Bureau of Meteorology (BOM) has warned major flooding is possible for parts of the Lower Hunter and several inland NSW rivers, while coastal catchments and Greater Sydney may flood this weekend.

Sydney is experiencing its wettest ever year, with the rain gauge at Observatory Hill passing 2200 millimetres today - breaking the previous annual rainfall record of 2194 millimetres set in 1950 .

NSW Emergency Minister Steph Cooke says Saturday is “likely to be our danger day” for Sydney and surrounding areas.

“We’ve seen a lot of rain around Sydney today but it’s only going to get worse unfortunately,” Ms Cooke said.

"It’s going to be a challenging few days. Our landscape is completely saturated, our dams are all but full and our river systems have got a lot of water coming down them, so any rainfall has the potential to cause riverine flooding.”

BOM Senior Forecaster Gabrielle Woodhouse says the state is set for “quite a significant and serious” system, with widespread rain and thunderstorms, and renewed and prolonged flooding inland that would move eastward.

“The flood outlook looks set to worsen on the weekend and potentially reach significant, major flood levels,” she said, especially on the western slopes, including Bathurst and Forbes. This would be “prolonged, widespread and extensive,” with areas away from rivers and creeks set to be affected.

BOM’s latest Flood Watch advisory, issued this afternoon, says heavy rainfall across Sydney since Wednesday has already caused minor flooding along the Hawkesbury River at North Richmond. Some communities have been isolated by flooding, and the SES is preparing for food and medicine drops, and backup crews have been brought in.

Up to 100mm could hit already-sodden areas by the end of the weekend as further heavy rain and thunderstorms are forecast for much of NSW.

“This is likely to cause renewed flooding over inland NSW and Hunter and Greater Sydney districts,” BOM said.

Certain coastal catchments would likely experience flooding from Saturday, while renewed major flooding is likely for the Gwydir, Namoi, Macquarie, Belubula, Lachlan and Bogan rivers from today.

Northern and southern Sydney, the Illawarra Coast, Bathurst, Orange and Newcastle are likely to be affected, and many rivers, including Parramatta, Georges, Upper and Lower Nepean, Hawkesbury, Upper Hunter, Upper Murray, Goulburn, Murrumbidgee and Mitta Mitta.

Insured losses have climbed to $5.45 billion from Australia’s costliest ever flood, which struck NSW and Queensland in the early months of this year. That estimate from the Insurance Council of Australia (ICA) creeps toward the $5.57 billion 1999 Sydney hailstorm bill, which for two decades has held the title of most expensive Australian catastrophe.