Newcastle's air quality was classified as "hazardous" on Friday morning as the city recorded the highest levels of fine particle pollution in the state.
NSW Health issued a bushfire smoke alert for a third day, advising those with asthma or other lung conditions to limit their outdoor activity.
The poor air quality has also resulted in the cancellation of the numerous Newcastle sporting fixtures this week including men's hockey and junior cricket.
Environmental Justice Australia researcher James Whelan said while bushfire smoke was are contributing to the poor air quality, the lack of a control strategy to minimise background concentrations resulted in higher air pollution peaks during unpreventable events such as bushfires.
"Newcastle, the Upper and Lower Hunter experience some of the highest air pollution concentrations anywhere in NSW, primarily due to coal mines, power stations and industries such as Orica and Tomago," Dr Whelan said.
"NSW needs an air pollution control strategy that's implemented 365 days of the year, with actions to minimise harmful pollutants. By reducing the baseline or background pollution levels, we'd see lower pollution levels during unpreventable events such as bushfire."
The group has urged the state government to finalise the state's air pollution control strategy, which was initially drafted in 2016.
The majority of the smoke over the Hunter has travelled down the coast from a fire burning in the area of Lake Innes and Lake Cathie, south of Port Macquarie.
The fire burning around Lake Innes has ripped through a known koala habitat and breeding ground home to a healthy population of hundreds of the vulnerable species.
Seventy fires were burning across the state - 44 of which were uncontained - on Thursday evening.
NSW Health said children, older adults and people with heart and lung conditions were most vulnerable to the effects of air pollution and excessive smoke.
"If you have asthma or a lung condition, reduce outdoor activities if smoke levels are high. If you have shortness of breath or coughing develops, take your reliever medicine or seek medical advice," a spokeswoman said.
The smokey conditions are expected to remain until Monday.