The scheme, which was established by the Gillard government and continued by the Coalition, has been plagued with issues relating to coverage, access and demand, as it struggles to keep apace with the rollout timetable across the country.

A 2017 Productivity Commission review found the scheme was improving the lives of many participants and their carers. However, it also found participant intake had "compromised the quality of plans and participant outcomes", while the rollout schedule risked the National Disability Insurance Agency "not being able to implement the NDIS as intended".

Mr Turnbull said the joint NSW-federal agreement aligned with the Productivity Commission's recommendations. The 4 per cent hike in NSW's annual contributions, which passed $3 billion in 2018-19, is aimed at keeping pace with population and price increases.

The two governments have also agreed to jointly fund an NDIS reserve from July 1, 2019, which would "provide greater flexibility to manage the sustainability of the NDIS".

Under the agreement, NSW would also have access to $3.1 billion of DisabilityCare Australia Fund payments between 2018-19 and 2023-24.

Ms Berejiklian said the agreement "shows our unwavering commitment to the full rollout of the NDIS and ensures we can focus on supporting people with disability".

"I am proud that NSW was the first state to sign up to the NDIS and the first to implement – now we are the first state to reach a long-term agreement with the Commonwealth," she said.

More than 84,000 people in NSW have signed up to NDIS, including more than 16,000 people who had not previously accessed government‑funded specialist disability supports.

The NDIS full scheme agreement for NSW will take effect from July 1, 2018.