The rule of one nurse for every three patients will be first enforced in EDs, before an advisory panel of health leaders analyses the needs of other wards to determine what staffing levels are imposed around the state.
The group will advise on the speed of the rollout, with Health Minister Ryan Park hoping to achieve it in the government's first term.
"It will take time, but we have to start in our emergency departments," Mr Park said on Thursday.
"We believe emergency departments are the best place to start the reform because in a lot of ways they're the front door for the public to our hospitals and they have been hit arguably the hardest in terms of over the last few years of challenges that the pandemic has brought with it."
Like most Australian jurisdictions, NSW calculates the number of nurses by care hours per patient day, which the nurses and midwives union has long argued was failing to deliver safe supervision to patients.
In 2015 Victoria shifted to ratio mandates - one nurse for every four patients on medical and surgical units, and one to three in emergency departments. Queensland followed suit in 2016.
"Since then, these ratios, 1:4 morning and afternoon and 1:7 at night, have saved more than 145 lives and up to $81 million," Queensland Nurses and Midwives Union secretary Beth Mohle told AAP.
Australian Nursing and Midwifery Federation Victorian secretary Lisa Fitzpatrick said improving staffing levels is one of the most effective recruitment and retention tools because it reduces staff workloads and improves patient care.
"When you improve workloads, then nurses and midwives who have decided to take a break come back, and those nurses and midwives who reduced their hours to cope with the pressure start to increase their shifts," she said.
NSW Premier Chris Minns said the long lead-time in improving nurse-to-patient ratios across the state was partly explained by Labor's separate commitment to hiring 1200 new nurses and midwives by 2027.
But more pressing was the need to slow the departure of staff, which Mr Minns hoped would occur once the panel's advice was put in place.
"It's a lot easier to hold on to the talented, experienced, trained officials that we already have in our NSW health system than trying to replace that experience in the open market," he said.
NSW nurses held high-profile rallies and protests in recent months calling for enforced nurse-to-patient ratios, saying the system had left them burnt out.
NSW Nurses and Midwives Association general secretary Shaye Candish, one of four union officials on the seven-person panel, said she believed the government's policy delivered on her union's ratio claim.
However, she said some specialties were missing out.
"We've told the government there is much more to be done from that aspect," Ms Candish said.
The panel, which includes senior NSW Health staff, will report to department secretary Susan Pearce.
The government had ordered many reviews but there hadn't been much action since it won the March election, Opposition Leader Mark Speakman said.
"We as a government increased the number of nurses and midwives by 28 per cent, doctors in hospitals by 54 per cent and health spending by 98 per cent," he said.
"It's unclear how Labor thinks they can improve on that."
