NSW opposition leader Luke Foley has pledged to replace the Queen's Birthday public holiday if Labor wins the state election next year.
Mr Foley announced the plan on Monday, saying a day recognising Indigenous history would be "another step in the process of reconciliation".
It would also be in addition to a Labor commitment to fly the Aboriginal flag on the Sydney Harbour Bridge every day of the year.
"We must acknowledge the special place the First Peoples occupy in the story of our state and nation," Mr Foley said in a statement.
He said a Labor government would also establish a treaty process in NSW to provide a truthful basis for reconciliation.
Opposition spokesman for Aboriginal affairs David Harris said the public holiday step was a small change to acknowledge the past.
"It's important for us to build on the existing relationship with the NSW Aboriginal community to empower them to achieve lasting generational change," he said.
Kamilaroi woman Cheree Toka began the campaign to fly the Aboriginal flag on the Sydney Harbour Bridge every day and her online petition has attracted more than 87,000 signatures.
The flag is currently raised 15 days a year - on Australia Day and during reconciliation and NAIDOC weeks.
Ms Toka hopes to present her petition to state parliament in the final sitting week in November.