Education Minister Sarah Mitchell said creating a stronger career path for classroom teachers which better rewards excellence was key to modernising the education system and attracting more people to the profession.
"NSW has some of the best teachers in the world, but they often leave the classroom and move into management roles to secure higher pay and career progression," Ms Mitchell said on Thursday.
"This model is not 'performance pay', this is about expanding the career options for teachers and keeping our best in the classroom."
Teachers in NSW start on a salary of $73,737, which increases to a maximum of $117,060 if they gain accreditation as "highly accomplished" or lead teacher, while assistant principals get $126,528.
The announcement comes a day before the nation's education ministers meet to discuss the ongoing issue of chronic teacher shortages.
NSW teachers' unions are at loggerheads with the Perrottet government over pay and staff shortages they say have led to unmanageable workloads.
Public school teachers have walked off the job three times this year, and NSW Teachers Federation president Angelos Gavrielatos says the crisis is putting the state's education future at risk with some 3800 teachers needed by 2027.
The unions want a pay rise of five to seven per cent, while the NSW government has offered three per cent.
University of Melbourne's John Hattie, a professor of education, is providing the government advice on the proposed reforms.
"The rewarding of excellence and expertise is the right topic to realise high standards and maximise positive impacts on students," Professor Hattie said.
The government says it will consult with teachers, parents and other stakeholders before implementing any changes.
30°C