Under the plan, the blocks of up to 30 storeys will be built near transport hubs in designated "urban activation precincts" to boost high-density housing and employment.
Some of the residential and commercial development will be around new stations on the North West Rail Link, with the state government helping councils with a $50 million infrastructure fund.
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Box Hill, Ashfield, Drummoyne and Pennant Hills are among areas earmarked, along with parts of North Ryde, Macquarie Park, Epping, Wentworth Point, Homebush, Mascot, Randwick and the area around Anzac Parade from Maroubra to Phillip Bay.
The government will work with councils on changes in zoning and development controls and infrastructure upgrades in those areas.
Planning Minister Brad Hazzard said communities in the designated areas would be asked for feedback and no final decisions would be made about the precincts until the consultation process was complete.
"There's massive pressure at the moment on homes," he told ABC Radio.
"People line up on Saturday morning to get rental accommodation, to buy houses.
"This is about making sure that Sydney has those houses and preferably right near jobs and where there's major infrastructure."
