The NSW government has promised to toughen up hate-speech laws after the Parramatta police shooting.
Attorney-General Gabrielle Upton has conceded existing laws make it too difficult to prosecute radicals who preach violence.
"We cannot allow violent race-hate speech to fan flames of division and tear our community apart," Ms Upton said in a statement on Monday.
"Make no mistake, words are dangerous weapons for race hate preachers and violent extremists."
Recent events had "reinforced the necessity of being vigilant and guarding against the spread of racial vilification", she said.
The promised overhaul follows the recent targeted killing of Curtis Cheng at police headquarters in Parramatta, as well as a decision by the Director of Public Prosecutions not to charge Hizb-ut Tahrir's Sydney leader over speeches calling for a "jihad against the Jews".
Ms Upton said the Anti-Discrimination Act would be reviewed and proposed changes put before parliament next year.
However, the state's opposition wants to go further, creating a new hate-speech offence under the Crimes Act. This would allow police to initiate an investigation and remove a requirement that the attorney-general sign-off on any prosecution.
"As it stands, the law makes it virtually impossible for a prosecutor to secure a conviction against someone advocating violence through hate speech - that's clearly a gap which needs to be closed," Opposition Leader Luke Foley said on Monday.
The proposed changes come two years after a state parliamentary inquiry examined the current laws.
Ms Upton said many recommendations produced by that inquiry would be adopted, including a push to expand the window of time in which charges can be laid.