NSW government reveals plan to reduce number of Sydney local councils from 43 to 25

The NSW government has announced it will nearly halve the number of Sydney local councils from 43 to 25.

The proposal follows a review by the Independent Pricing and Regulatory Tribunal (IPART) showing nearly two-thirds of the state's councils were not financially "fit for the future".

Premier Mike Baird and Minister for Local Government Paul Toole said the proposal would see the creation of 35 new councils across the state, with mergers bringing the total NSW number down from 152 to 112. 

The 109 current regional councils will become 87, while Greater Sydney will fall from 43 councils to 25. 

"The size of government – look at the number of council in Queensland and Victoria - there are almost double the amount of councils here in NSW," Mr Baird said.

"It’s just not a sustainable position in the long run.

"Certainly change is not easy – it’s not the easy thing to do, but it’s the right thing."

Mr Toole hailed the changes as being necessary for NSW to progress, with the government claiming $2b in savings from the mergers. 

"We are not interested in just having councils that just exist," he said. 

"Everything is pointing change being needed in the local government sector."

The mergers involve Warringah council splitting in two between Pittwater and a new council with Manly and Mosman.

Warringah Mayor Michael Regan says his council and residents feel "dismayed" and "betrayed" by the plans.

Other mergers include Bankstown and Canterbury, Hurstville and Kogarah, Hornsby and Ku-ring-gai and two big mergers across the inner west.

Lord Mayor Clover Moore says the City of Sydney won't be part of any amalgamation.

The plan has been accused of being politically motivated by opposition local government spokesman Peter Primrose.

"This process has been a chaotic shambles from the get go," he told AAP.

"These boundaries ... are the result of trades within cabinet between ministers."

Greens MP David Shoebridge says the government's initial proposal of six mega councils across Sydney, which was later squashed by a community campaign, showed the process was dysfunctional.

"The government is making it up as they go along, it doesn't have a coherent plan and it definitely does not have a parliamentary avenue to force amalgamations," Mr Shoebridge said.

The Save Our Councils Coalition says it will fight the Baird government's plans.

"Make no mistake, amalgamations will see rates going up, libraries being closed down, child care centres privatised and services reduced," spokeswoman Nella Gaughan said.

The government is considering a proposal to set council rates based on property value, rather than land value.

This could mean inner city apartment owners would be forced to pay higher rates and homeowners on large blocks in outer suburbs may pay less.

"We're a bit bewildered as to how it's all going to work," Mr Regan said.

WHICH AREAS WILL MERGE?

Sydney:

* Ashfield, Leichhardt, Marrickville

* Auburn, Holroyd

* Bankstown, Canterbury

* Botany Bay, Rockdale

* Burwood, Canada Bay, Strathfield

* Gosford, Wyong

* Hawkesbury, The Hills

* Hornsby, Ku-ring-gai

* Hunters Hill, Lane Cove, Ryde

* Hurstville, Kogarah

* Manly, Mosman, Warringah

* North Sydney, Willoughby

* Parramatta

* Pittwater, Warringah

* Randwick, Waverley and Woollahra

Regional mergers:

* Armidale-Dumaresq and Guyra

* Bathurst, Oberon

* Berrigan, Jerilderie

* Blayney, Cabonne, Orange

* Bombala, Cooma-Monaro, Snowy River

* Boorowa, Harden, Young

* Conargo, Deniliquin

* Cootamundra, Gundagai

* Corowa, Lockhart, Urana

* Dubbo, Wellington

* Dungog, Gloucester

* Goulburn Mulwaree, Palerang

* Jerilderie, Murrumbidgee

* Kiama, Shoalhaven

* Murray, Wakool

* Newcastle, Port Stephens

* Palerang, Queanbeyan

* Shellharbour, Wollongong

* Tamworth, Walcha

* Tumbarumba, Tumut