But legal changes will be needed to bring round-the-clock monitoring in-house after "repeat instances" of bailed alleged offenders committing serious offences.
Private ankle monitors have been in the spotlight since state governments and police were left in the dark about the collapse of Melbourne-based GPS monitoring service BailSafe in January.
A second company was caught in the fray on Tuesday after it emerged a high-risk alleged offender cut off his ankle monitor after being bailed days earlier.
Matthew John Langford was released on bail for drug supply, weapon and theft charges on Thursday, on the condition he wear a GPS ankle monitor provided by a nominated third-party and live with his mother.
He severed the bracelet within an hour of being released, the Daily Telegraph reported.
He was allegedly spotted driving a hire car near Mays Hill in Sydney's west about noon on Tuesday, before ramming a police car and being arrested a short time later, NSW Police said.
Premier Chris Minns said he was "ruling a line in the sand" and would ban private electronic monitoring for people on bail.
"It's clearly not working," he said.
"There are repeat instances over and over again of individuals who are accused of very serious offences in the state having access to private monitoring and then going on to commit other offences."
The change will require legislation, which the government said it would develop in close concert with parties including police and victims' advocates.
That process could take several months.
The state government said several different private firms were involved in the monitoring of "under 120" people on bail in NSW.
The shift brings NSW into line with Victoria after the southern state was left exposed by BailSafe's silent slip into administration.
Ankle monitoring is typically reserved for offenders accused of serious crimes, with more cashed-up individuals offering to hire private firms to increase their prospects of being granted bail.
Some Supreme Court judges have criticised the practice for indirectly discriminating against poorer accused offenders.
The collapse of BailSafe Australia spread panic through the Victorian government in February and prompted the state to cut ties with all private GPS monitoring companies.
Eight alleged offenders were supposed to be monitored by BailSafe in Victoria and another 20 in NSW.
Victorian shadow attorney-general Michael O'Brien said the government had dropped the ball and would have been "better off putting an AirTag on some of these people".
