Young people in foster care in NSW will continue to get support until the age of 21, bringing the state into line with the rest of the country.
The NSW government on Sunday announced it would spend $100 million over five years to support vulnerable young people after they turned 18.
Premier Dominic Perrottet said reaching adulthood was an exciting time in any young person's life and the government wanted to support them no matter their circumstances.
"We know it can be a bumpy ride to living independently but this support offers some reassurance along the way," he said.
Families looking after a child in state care will be able to keep receiving a carers' allowance until the young person turns 21.
Young people who don't remain in a carers' home will be able to receive an extended after-care allowance.
Families Minister Natasha Maclaren-Jones said young people would still receive a leaving-care plan under the changes.
Home Stretch, a campaign backed by various charities to extend state care to the age of 21, described it as a "landmark commitment" from NSW that meant the reform was supported in every state and territory.
National chair Paul McDonald said most 18-year-olds still lived at home with their parents because they weren't ready to strike out on their own and the same was true for young people in foster care and other state arrangements.
"We know from other states and territories that we'll get great outcomes by stepping in to give additional support," he said.
"This help will reduce the risk of homelessness, or young people ending up in jail."
The NSW government had faced calls to extend its support for young people in care after figures showed nearly 50 per cent of those leaving care became homeless and jobless within a year.