Sydney residents face water restrictions for the first time in a decade as dam levels continue to drop and NSW grapples with drought.

Water Minister Melinda Pavey has announced level one restrictions will be imposed across greater Sydney from Saturday.

The restrictions have been triggered early as dam levels in the city drop to 53.5 percent.

The restrictions include requirements hoses have a trigger nozzle, lawns and gardens are not watered between 10am and 4pm and hoses are not left unattended unless topping up a pool.

Residents have a three-month grace period before they face fines, ranging from $220 for individuals and $550 for businesses.