The state government's campaign rezoned 8.5 million hectares to "green" overnight, taking huge chunks out of the amber zoning and even 3 million hectares from the high-risk red zone.
Primary Industries Minister Ian Macdonald said: "This is a massive step towards stamping this disease out once and for all with more than 84 per cent of NSW part of the green zone," Mr Macdonald said.
"Lowering the equine flu infection risk in large areas of the central tablelands, south-west, north and north-west of the State will come into effect at midnight following clearance testing of thousands of horses.
"The EI amber zone will be slashed by 5.6 million hectares and the high risk red zone cut by 3 million hectares.
"Eradicating horse flu from these areas is our single biggest success to date and yet further proof we have this highly contagious virus on the run and close to being under control.
"The EI free green zone now covers more than 84 per cent of NSW, while the medium risk amber zone is confined to under 10 per cent of the State and the high risk red zone has been cut to just 3 per cent.
"From tomorrow, horse owners in the new green zones will be free to move their horses within the zone after obtaining a Travelling Horse Statement for each movement."
Mr Macdonald said successfully containing the EI virus to already infected regions had enabled proof-of-freedom testing to free up lower risk areas of NSW.
"This is another major step in the Government's plan to progressively downgrade the risk in infected areas as horse flu burns out, lifting movement restrictions, easing disinfection requirements and gradually resuming horse events," he said.
"Maintaining good biosecurity and keeping tight control over horse movements in high risk areas remain vital to keep horse flu contained, and continuing with second round vaccination is crucial to continue to build up horse immunity.
"If everything keeps going to plan, the next step of the recovery phase will be the reintroduction of movement restrictions in the purple zone in January.
"This will enable us to commence surveillance and resolution testing in purple zone.
"But we still have a long way to go before horse flu is eradicated. It will take time for the virus to burn out in already infected areas, even without new outbreaks.
"This will be followed by a lengthy period of surveillance testing and investigation to confirm that EI has been eradicated."