More than 18,000 new homes across Macarthur have been earmarked for immediate rezoning to boost the region's housing supply.
The state government is expected to fast-track the rezoning process for two large-scale developments in Camden.
A regional housing taskforce will also be set up to combat the housing supply shortage across NSW.
Planning and Public Spaces Minister Rob Stokes made the announcement at a recent Urban Development Industry Association (UDIA) luncheon and said the government's focus was now on creating new 'greenfield' housing supply.
"It's clear that as a result of the pandemic, demand for greenfield housing has increased even more than anticipated so we are responding with new housing in some of Sydney's best growth areas, the south-west and the Macarthur," Mr Stokes said.
"Housing supply is not just important in Sydney but across our regions, which are experiencing strong growth as we bounce back from drought and as more people are working flexibly and remotely.
"This is why I am setting up a regional housing task force to report back by September on how we can better use the planning system and other levers to boost supply."
One of the future developments that is expected to undergo fast-tracked rezoning is Lowes Creek Maryland.
The Macarthur Developments proposal encompasses 7000-homes in Bringelly on the site of the historic Maryland and Birling Homesteads.
The development would be the same size as Oran Park, with more than 23,000 people expected to live there.
The proposal includes plans for a shopping centre, 60 hectares of green space including 21 parks and public open spaces and six new playing fields, and a combined primary and high school.
Camden Council staff raised concerns about the amount of green space and the density of the site when it was first proposed in 2018.
However, Macarthur Developments general manager Stephen McMahon told the Advertiser in 2018, that there was no shortfall in open space at the site.
"The Department of Planning's own figures state over a third of the site (34 per cent) will be dedicated to public parkland, 10 per cent to heritage curtilage and seven per cent to community and school uses," Mr McMahon said.
"Generally, new housing estates dedicate around 10 to 12 per cent of the site for open space and community uses and nothing for heritage curtilage.
"There is no other housing estate in Camden that dedicates such a large amount of its site to parkland and publicly accessible spaces."
Two sections of planned developments at Leppington, known as Leppington 2 and 5 are also expected to be rezoned immediately.
Leppington town centre was rezoned by the state government in 2013 and in 2017 it was identified as a 'priority precinct' because of its social, economic and environmental impacts on surrounding areas.
Its new town centre is expected to support the growing community with new schools, shops and services, as well as public transport and improved road infrastructure.
Under the government's plan to fast-track the housing development up to 2400 new dwellings will be built including 1900 dwellings in stage two and 500 dwellings in stage five.
The proposal also includes 8.32 hectares of open space, 2.96 hectares identified for a school site, 23.18 hectares of land zoned for other infrastructure purposes and a 7.6 hectare park vauled at $4million.
A Camden Council spokesman said the council was"working with the NSW Department of Planning, Industry and Environment to finalise the rezoning of Leppington for stages 2 and 5 and Lowes Creek Maryland precincts to provide certainty to landowners and to supply residential land to support the demand of housing".
Deputy Premier John Barilaro said a new approach was needed to help support those in the regions with new housing and make regional towns a magnet for people coming from the city centres.
"From Byron to Bega and Coffs Harbour to Dubbo, regional towns are booming, but in many parts of the state, planning has not kept pace with growing demand," Mr Barilaro said.
"Regional housing markets are complex and unique, and there could be a whole range of factors driving housing constraints and we need to unpack those so we can deliver new housing opportunities for our regional communities."
Other projects earmarked for immediate fast-tracking in Macarthur include the Glenfield precinct which is expected to be made up of 7000 dwellings, six new playing fields, 30 hectares of additional accessible open space and 50 hectares of land retained for Hurlstone Agricultural High School's agricultural needs.
The Wilton Town Centre precinct is also expected to rezoned as a matter of priority.
This development will include 1600 dwellings, 17 hectares of employment land that could support approximately 4700 jobs and 39 hectares of environmental conservation land.