More than 3000 NSW public servants will be relocated to western Sydney to ease traffic in the CBD and to boost the west's economy.
Premier Barry O'Farrell says the move makes economic sense as residents will be able to work closer to home.
Unions have slammed the government for not consulting staff about the plan or explaining why the relocations are needed.
Announcing the plan in Sydney on Friday, Mr O'Farrell said the move would encourage other businesses to move to the rapidly growing western Sydney region to service the government buildings.
The plan, which will start next year, will relocate the Ambulance Service from Rozelle to North Parramatta and the sport department from Sydney Olympic Park to Penrith.
A number of other Hurstville and CBD government offices will also head west.
The premier, speaking at a business forum in western Sydney, said it was clear many government agencies weren't located in the right areas.
He noted that more than 800 environmental bureaucrats were located in CBD offices "where the closest tree is in Hyde Park".
Moving government offices to the west was part of his government's "decentralisation" plans and would support western Sydney businesses, Mr O'Farrell said.
"Here in western Sydney, the potential of our citizens is limitless," he said.
Anne Gardiner, from the Public Service Association, accused the government of not being transparent about the decision.
She says the announcement was "surprising" and came out of the blue.
"Given the corruption allegations that are being made against different politicians, when government makes decisions, they need to be really clear that they've done proper evidence-based decision making," she told AAP.
The Health Services Union said the announcement was "very strange" and not properly thought out.
Mr O'Farrell said the announcement was a start of a "long-term campaign" to relocate jobs out of Sydney's CBD.
"Not every public servant needs to be in the most expensive business district in Australia," he said.
He defended moving the sports department out of the Olympic Park sporting precinct to Penrith, saying the western Sydney suburb was "rich with sporting facilities".
"If the O'Farrell Liberal government were serious about moving jobs to western Sydney, the premier would be moving his own department, the Treasury and transport offices out of the Sydney CBD," Opposition Leader John Robertson said in a statement.
