From July 1, players will only be able to put $500 cash into machines at a time, down from $5000, with the changes approved by the state gaming regulator.
The number of machines has also fallen by 3000, with the government not issuing new licences.
More than 80,000 poker machines operate in NSW, with pubs and clubs permitted to trade machine licences.
Ultimately, the government plans to reduce machine entitlements further by introducing mandatory forfeitures when trades take place.
"Further down the track ... for every two entitlements traded, one will be forfeited - which will see numbers drop at a faster rate," Gaming and Racing Minister David Harris said.
Opposition gaming spokesman Kevin Anderson said the coalition had planned similar measures to reduce pokie numbers ahead of the last election, and urged the government to push forward with its 12-month cashless gaming trial.
"We broadly support what we're seeing today but that doesn't mean we won't keep watch and make sure that they're following through, particularly with that cashless gaming (trial)," Mr Anderson said.
Also on Friday, ClubsNSW announced former Tabcorp and Star Group executive Rebecca Riant will step in as its new chief executive officer.
As head of the peak body, Ms Riant will be responsible for guiding the clubs industry through the controversial pokie reforms which have received significant pushback from some venue operators.
"I have a deep appreciation for the integral role that clubs play in their communities right across the state, particularly in regional areas," Ms Riant said.Â
"Clubs combat social isolation by providing a comfortable, safe environment for people to connect; they support tens of thousands of jobs all over NSW."
Prior to the NSW election, Labor committed to help curb problem gambling and money laundering through an independent trial of cashless machines.
The trial was intended to begin in May but was delayed due to what the government says are stakeholder and crossbench concerns.
This week Opposition Leader Mark Speakman slammed the delay saying it was hurting those in need of assistance.
Mr Harris said it was important to navigate the changes while engaging with industry to maintain the "vibrancy" of hospitality and gaming in NSW.
"We promised the people of NSW that we'd reform the gaming sector in a way that reduced gambling harm while future-proofing the industry," he said.
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