Premier Dominic Perrottet says the permanent agency will be dedicated to preparing NSW for disaster, as well as recovery and reconstruction efforts.
"This authority cuts through red tape, cuts through bureaucracy and ensures that our communities get back on their feet," he told reporters on Wednesday.
The Reconstruction Authority will be the lead agency for disaster management in NSW in all its phases from mitigation to rebuilding.
"Being an authority, rather than agency, gives it legislative powers to ... get the job done".
Mr Perrottet said the authority mandated with long-term rebuilding projects will have a CEO and a board, both accountable to the Planning Minister, by March next year.
A government-commissioned report into the flood response authored by chief scientist Mary O'Kane and former police commissioner Mick Fuller, had recommended establishing the body.
The review and a parliamentary inquiry both criticised Resilience NSW, created following the 2019-20 Black Summer bushfires.
The once-prominent lead agency will be subsumed within the new body after it came under fire for its bureaucratic response to flood victims in the Northern Rivers in unprecedented floods in February.
The premier did not outline what role former Resilience NSW chief Shane Fitzsimmons would play.
Deputy Premier Paul Toole said the body will give the government "the ability to do things differently".
"The Reconstruction Authority will have the power to get more dollars out the door quickly... and the ability to give planning approvals in a more timely manner and that's what these communities are looking for".
Mr Toole also noted the Northern Rivers Reconstruction Corporation, with an $800 million budget in its coffers to rebuild homes including in Lismore and Byron, will merge into the new reconstruction authority.
Emergency Service Minister Steph Cooke said the latest floods had stretched to 57 days affecting towns from Forbes to Moree and beyond.
