NSW public sector workers will get a pay rise above the long-standing 2.5 per cent cap, the premier has announced.

Dominic Perrottet says public sector wages will increase by three per cent in the next financial year and up to 3.5 per cent the year after, depending on productivity gains.

This provides for remuneration increases of up to 6.5 per cent over two years.

Existing health workers, paramedics, midwives, cleaners and other NSW Health employees will also receive a one-off $3000 payment in recognition of their efforts during the pandemic, Mr Perrottet said on Monday.

The wage rise, above the 2.5 per cent cap that has been in place since 2011, comes after industrial action and strikes from teachers, nurses, paramedics and other government workers in recent months.

Treasurer Matt Kean said the increase in wages was fair and sustainable in the current economic climate.

"NSW is currently enjoying the lowest unemployment on record and it is important to maintain competitive wages to attract and retain the best talent. In the context of a strong and growing economy this two-year increase to wages is an affordable and sensible policy."

The Public Service Association last week set a Monday deadline for the government to commit to a 5.4 per cent pay rise, otherwise it vowed there would be a strike on Wednesday.

The union will consider the offer but is waiting to see it in writing, PSA general secretary Stewart Little told AAP on Monday.

Finance Minister Damien Tudehope called on unions to pause industrial action.

There will also be a boost to the health workforce, with plans to recruit 10,148 full-time equivalent staff to hospitals and health services across the state over four years as well as more than 1800 new paramedics.

Health Minister Brad Hazzard said the $4.5 billion investment over four years was intended to relieve pressure on existing staff and ensure appropriate levels of health staffing for health infrastructure projects.

Opposition Leader Chris Minns on Sunday said he was glad there had been a breakthrough between unions and the government.

"It's going to certainly address some of the issues in relation to ambulance wait times," he said on Sunday.

Labor would still be scrutinising the announcement, Mr Minns said, noting the government is behind on a 2019 election promise to recruit 1500 more police officers by the end of this year.

In addition to increased wages, the government need to mandate nurse-to-patient ratios if it was going to attract and retain new workers, NSW Greens health spokesperson Cate Faehrmann said.

"They will struggle attracting skilled healthcare workers to fill these new spots," she said.

She said the announcement of additional staff did nothing for current health workers.

However, Health Services Union secretary Gerard Hayes said the government should be able to fill the new roles and the expanded workforce would bring relief to exhausted staff.

"It's too little too late ... (but) this will go some way now to making health fit for purpose," Mr Hayes told Nine's Today on Monday.

NSW Ambulance Commissioner Dominic Morgan said some 200 offers were being sent to paramedic graduates, many of whom are already eligible for employment.

"That's going to be a significant injection to just take the immediate pressure off," Mr Morgan told ABC radio.