The cabinet has expanded by two positions to include 26 members, with nine first-time ministers.
"I know that every one of these new ministers who will be appointed tomorrow has the experience, but more importantly, the passion and the energy to take NSW to the next level," Mr Perrottet told reporters on Monday.
It's the first major reshuffle since Mr Perrottet took on the top job in October.
Amid criticism that the government does not have enough women at senior levels, the premier has invited Liberals Wendy Tuckerman, Natasha Maclaren-Jones and Eleni Petinos, and Nationals MP Steph Cooke, to join the ministry for the first time.
However, Water Minister and Nationals MP Melinda Pavey has been dumped and Local Government Minister Shelley Hancock is also out after saying she'll step down at the next election.
There are now seven women in the ministry, one more than the previous line-up.
Mr Perrottet said he'd picked his team on merit, but acknowledged the Liberal Party needs to do better when it comes to the representation of women in parliament.
"I think increasing the female representation in the cabinet will be a great thing for our state," he said.
"I believe more diverse cabinets provide better perspectives."
Nationals MP Adam Marshall has been ousted, replaced as agriculture minister by Dubbo MP Dugald Saunders.
It's the first time in cabinet for Mr Saunders, who steered his electorate through a significant COVID-19 outbreak this year.
Arts Minister Don Harwin has also stepped down from the cabinet.
David Elliott is moving from police minister to the tricky transport portfolio, with the government battling problems with ferries and light rail and facing strikes from train staff.
Deputy Premier Paul Toole will take on the coveted police portfolio.
Mark Speakman remains attorney-general but gives responsibility for women's safety to fellow Liberal Natalie Ward, who this year chaired an inquiry into coercive controlling domestic abuse.
Planning goes from Rob Stokes to Anthony Roberts, who will also be minister for homes.
As Minister for Cities and Minister for Active Transport, Rob Stokes will be in charge of the big picture - the government's "six cities vision" - and smaller infrastructure projects like cycleways.
Manly MP James Griffin takes the environment portfolio from Matt Kean, who remains treasurer and also stays in charge of energy.
Mr Griffin tweeted he was "absolutely thrilled" to take the portfolio, and pledged to keep up the tempo of his "courageous, visionary" predecessor.
Mr Perrottet denied his cabinet was inexperienced, arguing there was a "blend" of experience and energy.
Veteran minister Brad Hazzard keeps the health portfolio amid a fresh surge in COVID-19 cases, which Mr Perrottet said was "crucial as we move to the next phase of this pandemic".
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