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 his ankle monitor off moments after being bailed days earlier.
NSW 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.
NSW Police remain on the lookout for Matthew John Langford after he was bailed on 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 is also wanted over firearm offences, police said.
"The monitoring was a condition imposed by the court and police are unable to comment," a police spokeswoman told AAP.
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 state government had dropped the ball and would have been "better off putting an AirTag on some of these people".
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