On Monday night, the City of Sydney voted to start the process of requiring new homes and businesses within the council area to be all-electric and gas-free.
The council takes in Sydney's central business district and surrounding inner-city suburbs, covering a resident population of more than 210,000.
Premier Chris Minns previously ruled out banning new gas connections in NSW, saying it would further complicate the "extreme" challenges the state faced in its transition to renewable energy.
But local councils have already moved to introduce their own bans, with Waverley in Sydney's east and Canterbury-Bankstown in the southwest establishing rules requiring some new buildings to have only electric appliances.
The City of Sydney motion noted the health and environmental hazards of using gas for heating and cooking, as well as the increasing costs.
The council committed to updating relevant planning rules to require all new residential and non-residential development applications across the local government area to be all-electric.
Its chief executive will prepare advice about which planning controls need to be amended to allow a ban to be enforced.
The council already plans to implement net-zero emission controls from October 1 applying to new offices, shopping centres and hotels to reduce their carbon footprint.
However, they will not apply to residential properties because of NSW laws preventing councils from introducing planning controls that set higher environmental requirements than are in place at a state level.
Lord Mayor Clover Moore will write to the premier urging him to develop a plan supported by rebates to help transition homes and businesses from gas to renewable energy.
"I have advocated for and would welcome a statewide mandate on banning gas connections by the NSW government, as has been done in Victoria," she said in a statement.
"Until that happens, we're looking at other ways we can electrify residential homes and reduce new gas connections within the City of Sydney."
In July, Victoria announced gas connections would be banned in any homes built in the state from next year onwards, while the ACT is prohibiting connections in new suburbs or infill developments by the end of the year.
Research commissioned by climate advocacy group 350 Australia showed the council's ban could save every household built in Sydney an average of $430 per year on energy bills.
Chief executive Lucy Manne said the council's proposal is a win for the environment and represents a wave of momentum across the state for action.
The NSW opposition does not support a statewide gas ban, but leader Mark Speakman said any measures needed to be introduced statewide rather than individual councils taking matters into their own hands.
"It's inconsistent to have one side of the street where you've got a gas ban and the other side of the street where there's no gas ban, so the government should be looking at a consistent approach," he said.
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