The bail overhaul, aimed at curbing youth crime in regional areas but opposed by youth advocates and legal groups, was set to expire in April.
But Labor revealed on Friday it wanted to extend the tougher regime until 2028.
"Under our bail laws, alleged offenders are more than twice as likely to be denied bail," NSW Premier Chris Minns said.
"The bail laws need to be retained - and that's exactly what we are doing."
The premier travelled to one of the regional towns hardest hit by youth crime, Moree, to announce the changes and meet affected business owners.
A $2 million boost for youth engagement, with a focus on reducing crime, improving family safety and supporting early childhood development, has also been unveiled.
Mr Minns's office cited data showing the bail refusal rate for applicable cases was more than double that of cases for young people charged with similar offences generally.
Between April and September, 97 of 123 alleged young offenders were refused bail using the new law.
The changes were sparked by community concerns about a rise in violent break-ins and car thefts in regional areas.
But they faced widespread opposition from youth advocates, legal groups and Labor-aligned lawyers.
Aboriginal Legal Service at the time said it would continue to fight "these dangerous laws"
The NSW Bar Association and Law Society of NSW also argued they would lead to higher incarceration rates for vulnerable children.
The three-year extension will require fresh legislation, reigniting rifts in government ranks and the progressive crossbench over the impact on youth.
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