Institutions which fail to join the child abuse national redress scheme risk losing future NSW government funding or contracts.
Attorney-General Mark Speakman says NSW will introduce financial sanctions to "ensure more institutions join the scheme as soon as possible".
Mr Speakman says the policy was adopted at a meeting of the Ministers' Redress Scheme Governance Board last week, where ministers agree that institutions must join without delay to ensure survivors of child sexual abuse can access redress.
"Ministers agreed at the meeting that institutions that fail to join the scheme will be vulnerable to sanctions, including being ineligible for government funding," Mr Speakman said on Tuesday.
"By introducing financial sanctions, NSW will build on the board's April announcement to ensure more institutions join the Scheme as soon as possible."
The April announcement was that institutions named by the Royal Commission into Institutional Responses to Child Sexual Abuse or named in an application received by the scheme were required to provide a clear written statement setting out their intention to join by no later than June 30.
These institutions must join as soon as possible, but no later than December 31, 2020.
Institutions that are named after June 30 will have six months to join.
On July 1, the Commonwealth publicly named six institutions that failed to signify their intent to join the scheme, but this has now reduced to four.
Australian Associated Press