Any hopes for offshore drilling projects are likely to be scuppered by a NSW-wide ban in the state's waters.
Going further than any other state and territory and delighting environmental groups, the NSW ban will stop petroleum and mineral exploration in coastal waters as well as its recovery.
The recovery ban forces companies operating in Commonwealth waters further out to sea to move extracted products directly to interstate or international ports, substantially raising costs.
It followed broad community opposition to proposals to develop PEP-11, a permit zone stretching from Newcastle to Wollongong.
"The people of NSW care deeply for our coastline and oceans, and want to see them protected," Nature Conservation Council chief executive Jacqui Mumford said.
"We’ve seen the devastating impact oil spills have on our marine life, as well as severe environmental impacts just from the exploration of offshore fossil fuel deposits."
Premier Chris Minns said he understood the ban could impact various projects off the east coast of NSW.
"But we've listened to the community - we believe this legislation is appropriate," he told reporters on Wednesday.
The decision should embolden the Albanese government to knock back gas company Advent Energy's application to develop PEP-11, the federal Greens said.
The PEP-11 permit area came to national attention after it emerged former prime minister Scott Morrison had used a veto power vested in him as resources minister, one of five portfolios he secretly took during the COVID-19 pandemic.
His use of the veto power was later ruled unlawful by the federal court, returning the PEP-11 approval application to the desk of the resources minister, where it remains before now-minister Madeleine King.
"What’s the PM waiting for now the NSW Labor government has given him political cover by introducing its own bill to kill the project?" Greens senator Peter Whish-Wilson said.
The Minns government's bill will likely face little opposition after the coalition tried to enact a statewide exploration and recovery ban with a bill in 2023.
Opposition environment spokeswoman Kellie Sloane said Labor had been forced to adopt coalition policy in "an embarrassing backdown after six months of resistance".
"After denying the opposition an opportunity to progress a bill dealing with PEP-11, it appears that Labor has just copied our homework," she said.
But the premier denied mimicking earlier bills, which he said ran the risk of being unconstitutional.
"I think everyone would agree, particularly in the midst of watching (ABC docu-series) Nemesis, that you have to be very careful in relation to decisions that the previous federal government made," Mr Minns said.
A parliamentary committee recommended voting down an opposition bill in November, noting the Commonwealth government needed to undertake fresh consideration of an application to extend the permit.
Committee chair Clayton Barr said at the time legal advice about a constitutional conflict regarding coastal waters led to the committee’s decision to recommend the bill not be supported.
