Advocates say the practice needs to be paused immediately until a way can be found to properly protect young people, who are routinely being subjected to the "invasive" practice.
Police Minister Yasmin Catley said she had met with stakeholders and was considering whether strip-search policies were fit for purpose.
"It's important to balance community expectations with community safety," she said in a statement on Tuesday.
Labor's upper-house leader, Penny Sharpe, later clarified in parliament that a formal review was not taking place but that Ms Catley "continues to meet with key stakeholders to ensure she has a balanced view in relation to this matter".
She took a question about who those stakeholders were on notice.
Premier Chris Minns said policy would be reviewed but police procedures were in place to help prevent dangerous drug use.
"Ultimately, the decision by NSW Police, particularly around music festivals, goes ahead so that young people, in particular, don't take illicit drugs and it doesn't lead to an overdose death at music festivals," he told Nine's Today program.
Chris Minns says the practice of strip searching by police is a difficult area of the law. (Bianca De Marchi/AAP PHOTOS)
"It'd be far better if these illicit substances weren't taken before people entered these music and rock festivals," he said.
The comments follow reports that more than two dozen children - including some as young as 12 - were strip-searched over summer, with data suggesting Indigenous youths were disproportionately targeted.
More than 1500 children have been subjected to invasive searches by police since 2016, representing an average of about 220 every year, Redfern Legal Centre said in a report published on Monday.
"Strip searches in NSW have become routine and often do not meet the required legal thresholds," the report said.
The figures underscored the urgent need for reform and should prompt the government to immediately pause child strip searches while it found a way to protect their rights and dignity, the centre's police accountability solicitor Samantha Lee said.
"Strip searches constitute an invasive, humiliating and harmful process and should only be used in exceptional circumstances when no other alternative exists," she said.
Greens justice spokeswoman Sue Higginson said talk around reviewing search policies had not led to a change and alternatives needed to be explored.
"Humiliating, degrading and traumatic strip searches of children is an entirely inappropriate power for the NSW Police to have and we should be moving away from this practice fast," she said.
In a damning audit in September, the Law Enforcement Conduct Commission found police often failed to follow proper procedures during strip searches.
Around 30 per cent of strip-search records audited did not demonstrate reasonable grounds for the procedure being carried out.
The report came a month after the new Labor government confirmed it would not support a recommendation from a special inquiry into methamphetamine use that called for limits on strip searches.
Its final response to the inquiry, which began under the previous coalition government, noted police had made "significant improvements to strip search practices".
NSW Police have been contacted for comment.
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