Previously banned until 1pm, the restrictions on retailers including supermarkets now won't be lifted until midnight.
Retailers who have exemptions - such as cafes, restaurants, chemists and newsagencies - can continue to trade all day.
It's hoped more people will commemorate veterans on Anzac day if shops stay closed. (Dean Lewins/AAP PHOTOS)
Retail trading restrictions vary across Australia's jurisdictions, with only Western Australia also imposing a total ban.
Victoria and Queensland allow trading from 1pm, Tasmania does from 12.30pm while South Australia only allows it in the Adelaide CBD between 12pm and 5pm.
The ACT and the Northern Territory have no restrictions.
The NSW RSL and the retail workers union back the ban, which Premier Chris Minns says is appropriate because of Anzac Day's status as Australia's most "solemn and significant" occasion.
"(We) will extend our retail trading restrictions across Anzac Day, to make sure our veterans are recognised and free to take part in services throughout the day," he said.
Anzac Day is marked by dawn and sunset services, veteran marches and wreath-laying ceremonies. (Dean Lewins/AAP PHOTOS)
"It might be inconvenient for a few hours, but closing our biggest corporate shops for a single day is a small price to pay for living in a free and open democracy."
RSL NSW president Mick Bainbridge said the pastoral needs of veterans were too often overlooked.
"This is an opportunity for them to take time away from work on this special day to commemorate their service," he said.
Anzac Day marks the anniversary of the first major military action fought by Australian and New Zealand forces during World War I, in Gallipoli in 1915.
The day is marked by a number of traditions, including dawn and sunset services, veteran marches, and wreath-laying ceremonies.
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