The Aboriginal flag will have a permanent spot on the Sydney Harbour Bridge, with the NSW government committing $25 million to install a third flagpole by the end of the year.
Premier Dominic Perrottet says flying the flag alongside the Australian and NSW state flags is an important gesture towards Closing the Gap.
"Our Indigenous history should be celebrated and acknowledged so young Australians understand the rich and enduring culture that we have here with our past," Mr Perrottet said in a pre-budget statement on Sunday.
"Installing the Aboriginal flag permanently on the Sydney Harbour Bridge will do just that and is a continuation of the healing process as part of the broader move towards reconciliation."
The flagpoles are about 20 metres high, the same as a six-storey building, while the flags require an attachment strong enough to withstand all weather conditions.
Transport for NSW and Aboriginal Affairs will engage with key stakeholders about the project.
The state government has also committed $37.9 million to improve before and after school care services and $206 million towards a sustainable farming program.
Treasurer Matt Kean says the landmark program will reward farmers who voluntarily reduce carbon emissions and protect biodiversity.
The NSW government also committed $56.4 million to the creation of a four-day walking track at the Dorrigo Escarpment through the Gondwana Rainforests on the NSW mid-north coast.
Environment Minister James Griffin said the funding was the largest capital investment in any NSW national park.
"I want everyone who comes to our NSW national parks as a visitor to leave as a conservationist, and this world-class Dorrigo Escarpment Great Walk helps us achieve that," Mr Griffin said.
Some $28 million has also been committed to the state's farm forestry industry, with funds going to the support and education of farmers following the introduction of a new code of practice this year.
Deputy Premier Paul Toole said the investment reflects the increasingly important role farm forestry will play in supporting the sustainable timber industry.
Women in small business will also gain free access to TAFE courses and professional advice thanks to $15 million over the next four years.
Mr Kean says more than 95 per cent of businesses in NSW are small businesses but only a third are run by women.
The Perrottet government is due to hand down its 2022-23 state budget this Tuesday.
Mr Perrottet, Mr Kean and Planning Minister Anthony Roberts are scheduled to make a further budget announcement in Sydney's northwest later on Sunday morning.
