Industry regulator Cemeteries and Crematoria NSW will be given expanded powers following a report into the sector that identified the sector had been severely mismanaged.

Multiple religious groups were set to run out of burial space within three years, crown cemetery operators had accumulated more than $300 million in debt and rogue operators had been left largely unregulated to prey on vulnerable people, the regulator's 2021 report found.

It recommended stronger protections for customers, sustainable burying practices, work to identify more cemetery land and more certainty over the management of crown cemeteries.

The regulator is rolling out the first statewide licensing scheme for cemeteries and crematoriums to set performance standards and consumer protections.

The scheme will provide more pricing and contract transparency, set standards for maintenance and customer service and ensure operators comply with religious, cultural and spiritual requirements.

Operators will be required to have clear language and standard terms and conditions for contracts to minimise the likelihood of rogue operators gouging vulnerable people.

From July 1, an existing levy already applied to crown cemeteries will be expanded to all active operators to help pay for the regulator's expanded role and staffing.

As part of the overhaul, the government plans to overhaul cemetery funding by mid-2025 to ensure enough money was set aside to ensure they were maintained, even after they became inactive.

To free up cemetery space, authorities are also looking at options like increasing access to "renewable internment" and allowing families to use permanent grave sites to bury multiple members.

It will also investigate whether there were options to "sensitively renew and repurpose older areas in cemeteries while continuing to preserve the perpetual bodily interment rights of those interred".

Lands and Property Minister Steve Kamper said cemeteries had been neglected by previous governments, leading to a lack of burial space in Sydney and allowing bad operators to go unregulated.

"Losing a loved one can be the most difficult time in a person's life," he said.

"We need to lift the bar with stronger regulation and better planning to ensure cemetery and crematoria operators and the public have transparency around pricing, service quality and future certainty."

The government warned in 2023 that some Orthodox and Muslim communities had just three years left before their allocated grave space in Sydney's crown cemeteries was filled.

The dire situation and other mismanagement concerns prompted the amalgamation of four crown cemetery managers into a single entity.

The Catholic Metropolitan Cemeteries Trust, which manages five large cemeteries across western Sydney, was left untouched in the overhaul.

Australian Associated Press