Primary Industries Minister Ian Macdonald said the downgrading of the infection risk in large parts of the north coast, northern tablelands and north-west came into effect yesterday.
"This good news shows that we have turned the corner," he said. "The low risk green zone now covers more than 73 per cent of NSW, while the higher risk amber zone is confined to just 17 per cent of the state.
"Horse owners in new green zone strips along the Queensland border east from Moree and down the north coast to Taree can now breathe a lot easier and begin moving their horses again.
"Other areas moved to green include most of the Coonamble, Walgett, Warren and Shoalhaven local government areas."
Mr Macdonald said successfully containing the virus to already-infected regions had enabled proof-of-freedom testing to free up lower risk areas of NSW.
He said the quota of samples required for a zone to be eligible for a change from amber to green zone had been collected, and cleared as free from disease. However, on-going testing would continue as a precaution.
"The Government's aim is to progressively downgrade the risk in infected areas as the virus burns out, freeing up some movement restrictions, and progressively enabling the resumption of horse events," he said.
"Keeping tight control over horse movements, improving horse immunity through second-round vaccinations, and maintaining good bio-security remains vital in high risk areas if we are to achieve our goal of eradicating horse flu.
"We still have a long way to go. Even if there are no new outbreaks, it will still take time for the virus to burn out in already-infected areas, followed by a lengthy period of surveillance testing and thorough investigation before we can be certain that we have won the battle.
"It is very important horse owners in the new green zone continue to play their role by following the general bio-security and movement advice that will apply to all horse owners until horse flu is completely cleared from NSW."
The new zoning breakdown has 73% of NSW in the protected green zone, 17% in amber, 7% red, and 3% in the purple breeding zone.
Meanwhile, state authorities are urging horse owners with animals in the purple zone that have not contracted flu to contact their local vet to organise vaccination.
NSW deputy chief veterinary officer Ian Roth said owners of uninfected horses had a vital role to play in stamping out the disease.
"There has been a decline in vaccination requests in recent days, so we are reminding owners that should their vaccinated horses become infected, the severity of infection would be greatly reduced and it would help speed up their recovery," Mr Roth said.
"Identifying and vaccinating uninfected horses will also help greatly in stamping out remaining pockets of virus in the purple zone.
"To date around 5400 horses have been vaccinated in the purple zone by up to 40 teams, but due to rain over the last few days and declining registrations, the vaccination rate has significantly decreased.
"We are mainly targeting isolated pockets that complex digital mapping has identified as having a combination of high horse densities and low infection rates.
"It is a targeted campaign, not blanket vaccination. Teams will vaccinate horses closer than 1km from an infected property, only if the infection is not active."