The landmark bill will recognise Aboriginal people as the owners of their traditional tongues and give higher priority to government supporting efforts to save languages.
It was only a few decades ago that Aboriginal languages like Dunghutti were forbidden to be spoken or sung.
But now the New South Wales government is trying to reverse the damage, with laws that aim to protect and revive languages.
Aboriginal Affairs Minister Leslie Williams has announced the move at a special launch.
"This will be the first act of its kind in Australia. Aboriginal people who speak their language are healthier. Aboriginal children learning an Aboriginal language do better at school. And that language renewal strengthens community."
The move has been applauded by many language leaders, including Wiradjuri elder Stan Grant Senior.
His work has been crucial to preserving and resurrecting his language.
"I think the rest of Australia should take notice now of what the Minister said there, and maybe they can all hop in and join us."
Mr Grant was one of the lucky ones, learning his traditional Wiradjuri at a young age.
He has become a champion of language ever since.
"Language does not belong to people, it belongs to the country we come from. It gives us a deep and firmly seeded sense of pride in who we are. That's one of the main things that language can do for you."
Muuurrbay Aboriginal Language and Culture Cooperative chief executive Gary Williams is a language teacher in his traditional country on New South Wales' mid-north coast.
He has dedicated much of his life to the revitalisation of his language, Gumbaynggirr.
"We at Muuurrbay acknowledge in our dictionary the people who were the inspiration for the organisation, and they said, 'We don't want our language to die, and we want the young ones to know our stories as well.' And we're basically keeping up that what they asked. It's also an acknowledgement of all of the good work and the goodwill of people that have really become involved with Aboriginal languages in New South Wales, and for us to be a role model for the other states."
The state government will work with language experts and the broader community to develop the legislation before it is introduced into parliament next year.
Leslie Williams, the minister, says she consulted with community leaders and experts in the lead-up to the announcement.
"I listened to what community told me earlier this year, those languages experts, the leaders within community. And they made it very clear to me that, if government was really serious about protecting language, about working with community to revitalise language, we would need to legislate. So that's what we're going to do."
Two centuries ago, more than 35 Aboriginal languages and about 100 dialects were spoken in New South Wales.
Today, all Aboriginal languages are critically endangered.
Government policy, including the removal of Aboriginal children from their families, contributed significantly to the destruction of those languages.
Maureen Sulter is a Gamilaraay elder from Coonabarabran, New South Wales.
She says her family felt the direct effects of losing language.
"It stopped my dad, my mum and all my uncles from speaking the language. So we weren't allowed to teach, to learn, our language, and that was detrimental to us. I looked at that as an adversity."
The new laws are aim at stemming the loss of language and strengthening culture for generations to come.
Gumbayngirr man Clark Webb is from the Bularri Muurlay Nyanggan Aboriginal Corporation.
He has been practising his language for the last 10 years.
"It's a healing thing for our community. So language acquisition for me and being able to now speak my language makes me feel not just an Aboriginal man, I'm a Gumbayngirr man, and that's a powerful thing for us. So our language is power, and our language is our soul."
Gumbaynggirr Language and Culture Nest's Michael Jarrett is also a Gumbayngirr man.
He teaches language at the centre and says the hard, but rewarding, work is beginning to pay off.
"I've been fighting for years and years and years for my people where I come from to learn the language and teach the language, and not only for Aboriginal people but for non-Aboriginal people. I think it's very important we all walk together in this journey. Language is .. for me, language is who I am, yeah?"