The fund has already seen $2 billion committed to 2700 projects including major infrastructure, recreational walks and upgrades to parks and swimming pools.

Deputy Premier Paul Toole said the fund was creating jobs and transforming the regions with infrastructure upgrades.

"The next phase of the fund will help build on those foundations with new investment in every corner of our regions," Mr Toole said on Tuesday as the state government's 2022/23 budget was handed down.

The budget has also allocated $2.4 billion in regional health spending over ten years to recruit and retain doctors, nurses and other health professionals, and provide training and professional development for existing workers.

"Our regions have faced a series of generationally significant challenges, including a historic drought, the Black Summer bushfires and - most recently - COVID-19 and devastating storms and floods," Treasurer Matt Kean said.

"We also believe in the immense capacity of the regional NSW to help our state build a brighter tomorrow."

Some 270 homes will also be built to house teachers and police, at a cost of $174 million under a $327.7 million investment in regional housing.

The overall funds will be used to fast-track planning, upgrade social housing, build new homes, create new places to stay for workers, and free up government-owned land.

The spending will also be used to tackle wide-ranging construction worker shortages in the regions.

"Developing new housing is complex, and this package will ensure we get the many parts of the system working together, including councils, industry, developers and community housing providers," Mr Toole said.

Mr Kean also said $120 million will be invested in infrastructure in regional areas, which will be key to unlocking new housing project.

Minister for Agriculture and Western NSW Dugald Saunders said $163.9 million would go to preparing primary industries against biosecurity threats, a 22 per cent boost from the previous budget.

"Stronger primary industries are critical to stronger regional communities -- that's why the NSW Government is committed to strengthening this sector now and into the future," Mr Saunders said.

The budget also includes $3 million over three years for a Regional Media Capital Grants package to support country news outlets, an initiative the government hopes will "breathe fresh life into regional news gathering and reporting".

The government also plans to spend $130 million setting up a Critical Minerals Activation Fund, which will be used to promote the state and its regions as an investment destination for minerals miners and create "thousands" of jobs.

Mr Toole said the state had an abundance of critical minerals needed to make batteries, electric cars and renewable technology goods.

"This new funding sends a strong message to surveyors, miners and processors that NSW is open for business," he said.

Elsewhere, the budget commits $59 million to regional youth programs - including the appointment of more Youth Community Coordinators, who identify young people needing additional support and help them access services.

It will also fund the continued rollout of the Holiday Break Program, giving young regional people access to recreation activities during school holidays.

"Young people are key to maintaining vibrant regional communities, and the NSW government is committed to ensuring regional youth have all the tools they need to grow into their best selves," Regional Youth Minister Ben Franklin said.

Australian Associated Press