Premier Chris Minns has announced NSW will have an extra public holiday in 2026 and 2027, when Anzac Day falls on Saturday and Sunday.
Remembrance services are held nationwide on April 25 but only people in Western Australia and ACT had been granted an additional public holiday on the following Monday.
Mr Minns said the Monday public holiday wouldn't detract from the solemnity of Anzac Day and NSW residents could be "trusted" not to skip commemorations.
"We expect big participation, major crowds," he told reporters on Sunday.
RSL NSW said it did not oppose the move after consulting with members.
"I've already had feedback from some smaller RSL organisations that ... it may give them an opportunity to get together on the Monday," acting president Vince Williams said.
But the decision hasn't garnered universal backing, with Mr Minns acknowledging not all business groups were on board.
"We know that it's somewhat of an additional burden for small businesses in particular," he said.
"But this is, we believe, an important thing to do for the state."
The decision will lift labour costs for hospitality venues to 75 and 100 per cent of sales, Australian Restaurant & Cafe Association chief executive Wes Lambert warned.
"So we'll be encouraging cafes and restaurants not to open," Mr Lambert told ABC TV.
"It won't just be a public holiday for office workers, it'll be a public holiday for everyone.
"Hospitality businesses are on some of the lowest profit margins in history, below three per cent, and they just cannot wear another public holiday in NSW."
Major lobby group Business NSW declined to comment on the decision.
NSW has fewer public holidays than all other mainland states and territories.
Anzac Day is one of 10 public holidays recognised nationwide in 2026.
Most Australians get another three or four, including those in Victoria, Queensland, ACT and South Australia.
But NSW enjoys just two extra: the King's Birthday in June and Labour Day in October.
Christmas Island celebrates an extra six, including two for Chinese New Year in mid-February.
The Minns government will consider making the Anzac Day change permanent and decide if the number of statewide public holidays is enough.
It will look at economic and social impacts of the extra public holiday in 2026 and 2027 and be subject to feedback from community, business and veteran groups.
Anzac Day doesn't fall on the weekend again until 2032.
The Victorian government confirmed it was unlikely to follow NSW in offering residents a make-up public holiday for Anzac Day in 2026 and 2027.
"We've got 13 public holidays a year - that's more than any other state," Victorian minister Harriet Shing said.
"So we don't have any plans to increase that number."
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