The Minns Labor government has committed to establishing a Great Koala National Park on the state's mid-north coast, including 106 koala hubs.
Advisory panels made up of industry, community and Indigenous representatives will be established to provide input on the park's creation.
While work to establish the park is carried out, the government announced timber harvesting had been halted by the NSW Forestry Corporation from September 1.
The proposed koala hubs cover more than 8400ha of state forest in areas where there is strong evidence of multi-generational, high-density populations of the animal.
The hubs cover about five per cent of the Great Koala National Park assessment area, but contain 42 per cent of recorded wild koala sightings since 2000.
The government is in talks with the forestry corporation on the next steps of the ban and to determine timber supply options.
Environment Minister Penny Sharpe said the park's creation was essential for saving koalas from extinction in NSW.
"The government is taking serious steps towards its creation and will work closely with the community, Aboriginal organisations and industry as the areas for inclusion in the park are assessed," she said.
Greens environment spokeswoman Sue Higginson said the announcement was welcome, but that continued logging in areas not flagged as koala hubs could still lead to critical habitats being destroyed.
She said the government needed to go further to protect the state's at-risk koala population.
"Koala hubs should be protected across the entire public native forest estate at a minimum, not as a bold announcement about a proposed national park," Ms Higginson said.
"If we don't stop destroying (koala) habitat across the state, they will be extinct before 2050.
"Voluntary undertakings by the forestry corporation to avoid koala hubs within one area of the public forest estate, while good, will not make the difference that koalas need."
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