A NSW government discussion paper released on Wednesday lays out a plan which could see subject matter experts being paid up to $180,000 per year.
Premier Dominic Perrottet said career pathways into teaching had become "siloed" with student teachers unable to earn an income until they completed supervised school placements.
"We want to attract the best candidates to our classrooms," he said.
"We want a modern education system that recognises and rewards excellence in our classrooms, strengthens the practice of all teachers, and makes the profession more attractive as a career."
In a speech at Western Sydney University on Wednesday, the premier expanded on the plan.
"We have a system in which the best teachers and the worst teachers are, for the most part, paid and treated the same," he said.
Mr Perrottet said he wants more "reading, writing and arithmetic, less puppetry, politics and wearable art".
NSW Teachers Federation president Angelo Gavrielatos said the premier was proposing an effective pay cut.
"We need a comprehensive plan that addresses uncompetitive salaries and unsustainable workloads to stop the shortages and secure the teachers we need for the future," Mr Gavrielatos said on Wednesday.
Teachers have gone on strike twice this year in a push for better pay and conditions as Australians face rising cost of living pressures due to inflationary pressures.
The government's three per cent pay rise offer is below the rate of inflation, meaning the boosted wages wouldn't keep up with increased living costs.
John Hattie, an education expert who is providing independent advice on the reform, said initial consultation had been positive.
"Conversations with stakeholders so far have been robust and constructive," Professor Hattie said in a statement..
"I look forward to continuing these important discussions to ensure we keep the best teachers in NSW classrooms."
The premier is also promising a new advocacy team for parents inside the education department.
It will give parents an alternative way to resolve issues with schools.
"We want those concerns to be resolved directly ... but sometimes that can't happen," the premier said.
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