Attendance records at Batemans Bay High School and Batemans Bay Public School have been examined after two students tested positive to coronavirus on Monday night.
NSW Deputy Secretary of School Performance Murat Dizdar said the Department of Education had followed all health advice, with staff from both schools working with NSW Health to identify close contacts.
"NSW Health are contacting the students, their families and the staff members who are identified as close contacts," Mr Dizdar said.
"In a high school, students move from lesson to lesson and those lessons and students and staff are identified by NSW Health," he said.
"In a primary school they tend to be more contained to a class.
"Let me assure both school communities they will be contacted by NSW Health if they are deemed to be a close contact.
"They will be provided advice for the duration they need to isolate."
It comes as a Jervis Bay restaurant has been forced to close after it was visited by two infected Sydneysiders on August 8.
Wild Ginger, in Huskisson, announced on its Facebook page that while none of its employees had tested positive, the business would be closed for two weeks while affected staff are in quarantine.
Students at Batemans Bay Public School will learn from home on Tuesday while the campus undergoes deep-cleaning and close contacts are notified.
"The matter has now been taken over and is being handled by the NSW Department of Health. They will be directly contacting anyone who was at Wildginger during the 'at risk hours'," the post said.
The three Batemans Bay cases are among 22 new infections in NSW reported in the 24 hours to 8pm Monday night.
All students and staff have been asked to isolate while this process is underway.
A third case was also identified in the region, the Southern NSW Local Health District confirmed.
This case is not linked to either school and contact tracing is underway, NSW Health said.
Director of Medical Services at South East Regional Hospital Dr Liz Mullins said parents should have confidence in the system.
"They should be confident that this is an example of the system working," Dr Mullins said.
"Someone has symptoms, they get the test, they get the result quickly, they isolate," she said.
Visitors to Batemans Bay and Moruya District Hospitals have been restricted, in a bid to protect patients and staff from the virus.
A cluster at Tangara School for Girls in Cherrybrook grew by eight cases. The total number of infections linked to the school is now 17.