Fixed signs for mobile speed cameras were taken down in November 2020, leading to a massive spike in revenue raised from low-level speeding offences.
The number where the limit was exceeded by 10km/h or less went from 3222 in October 2020 to 27,855 by February 2021.
Roads Minister Natalie Ward announced on Monday additional warning signs around mobile speed cameras would return next year, saying the government had listened to community feedback.
"Ensuring our local roads are as safe as possible for pedestrians and motorists is an absolute priority for this government," she said.
Ms Ward, an upper house MP, recently announced she would make a run for the lower house seat of Pittwater on Sydney's northern beaches at the March election.
Roads Minister Sam Farraway said the government had been told of cameras concealed behind poles and trees, and the point of the signage was to slow drivers down.
"We have heard loud and clear from the community on this issue," he said.
Labor leader Chris Minns said the government went from collecting about $4 million a year in low-range speeding fines to about $45 million during one financial year.
With an election less than five months away, the policy reversal was timed to placate voters, he said.
"The government's basically admitted what we've already known for many years now. This has been revenue raising on a giant scale.
"They've now backflipped in a spectacular fashion because they've been caught red-handed with their hands in your pockets."
The policy was introduced by former transport minister Andrew Constance, who said removing signage would change driver culture and behaviour.
"No warning signs mean you can be caught anywhere, anytime and we want that same culture around mobile speed cameras," he said in 2020.
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