Coal seam gas activity would be permanently banned in Sydney's core water catchment areas under legislation introduced to the NSW parliament.
Introducing the bill on Thursday, Opposition Leader John Robertson said Labor was putting the community first.
"There are some parts of our state which are so precious and so important that they must be permanently ring-fenced without delay," he said.
Under the bill, exploration licences, assessment leases, production leases and special prospecting authority relating to CSG activity in any Sydney water catchment special areas would be cancelled.
It would also prevent the granting or renewal of coal seam gas licence or leases in these special areas, which are also off limits to the public for activities like swimming and fishing.
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Mr Robertson said the bill would also quarantine the state from any compensation liability as a result of the ban.
He is investigating introducing a similar bill for catchment areas in the Hunter, the Central Coast and in far northern NSW.
Mr Robertson said the CSG sector had a role to play in the state's energy mix and that farming and mining must find a way to co-exist.
But he said parliament needed to face the "brutal fact" that the industry did not have the support of the community.
It comes after it was revealed on Wednesday that the Sydney Catchment Authority (SCA) asked its areas to be exempt from proposed amendments to the state's mining planning policy, saying longwall mining has already caused significant damage to watercourses and swamps.
