Lyon, playing his first game of the Australian summer after returning home from the UAE, had little assistance from a slow SCG pitch on Thursday but still threatened to snatch the Blues' first win of the season.

Australia's most prolific Test offspinner finished with figures of 4-88, having grabbed 4-30 and bamboozled Test skipper Tim Paine and George Bailey while igniting a late collapse.

"His game is at a level now where it doesn't matter what surface he bowls on, he's a challenge," Bailey said.

"We knew how we played him was going to be one of the factors in whether we chased the runs down."

Tasmania, set a target of 350 after a gentlemen's agreement prompted sporting declarations from Bailey and Peter Nevill, recovered from losing 5-51 to finish 7-264.

Beau Webster and Jackson Bird batted out 11.1 overs, surviving a tense finish in which Nevill stationed every fielder around the bat while Lyon bowled.

NSW's push for victory met stubborn resistance in Alex Doolan, who extended his bright start to the season with a knock of 90, and Webster, who finished 80 not out.

The hosts claimed a single wicket in each of the first two sessions before Lyon, dropped from Australia's ODI squad and asked to focus on his red-ball bowling by national selectors, busted the game open with a trademark diving caught-and-bowled effort to dismiss Jake Doran.

Lyon, tuning up for Australia's four-Test series against India that begins on December 6, then removed Bailey and Paine with pinpoint deliveries that kissed the top of off stump before Tom Rogers was out edging.

"It's always good to get one over the (Test) captain isn't it? Nah, I was a bit lucky it went through his legs," Lyon said, having toiled for 40 overs in the match before snagging his first wicket.

"The pitch provided a decent challenge ... (there was) nothing to work with.

"But obviously it was under covers for a whole day ... we can't control the weather.

"Disappointed about the result ... but it was absolutely brilliant for Shield cricket to have the double declaration. All credit goes to George for teeing that up with Nev."

Rain ruined day three of the contest, with only 4.3 overs of play possible, but Bailey and Nevill hatched a plan to keep all three results in play.

Tasmania declared overnight at 4-115. Nevill stopped NSW's second innings at 1-22 after four overs.

Paine, who helped Australia salvage a draw in Dubai last month, didn't bat in Tasmania's first innings then lasted eight deliveries in their second dig.

Australian Associated Press