The NSW government will spend $38 million to redevelop the Anzac Memorial at Hyde Park.

Premier Mike Baird announced the plan while addressing a ceremony to mark the centenary of the commencement of World War I at the memorial on Monday.

He said the redevelopment included plans to build an education and interpretation centre beneath the memorial and a water cascade.

“Today we mark 100 years since the commencement of the First World War and begin the state’s Centenary of Anzac commemorations that will be taking place over the next four years,” he said.

“The $38 million redevelopment will be the centrepiece and an enduring legacy.”

Mr Baird said that when the memorial was built the original concept of a water feature was not completed due to budget constraints caused by the Great Depression.

“The original design included the Pool of Reflection which was completed in 1934 to the north of the memorial. A second water feature planned for the southern end of the memorial and extending to Liverpool Street was never realised.''

About 164,000 men and women took part in World War I.

NSW Opposition Leader John Robertson said his grandfather had fought in Gallipoli and France and survived a gas attack.

''Most Australian families were affected and continued to be,” he said.

The state vice-president, Northern Country of the Returned and Services League of Australia, Peter Stephenson, delivered The Ode and, as the crowd repeated the promise, “Lest We Forget”, the Last Post sounded and the flags were lowered to half-mast.

A minute's silence followed.

Rouse sounded, the flags went to the mastheads and then invitees, guests and passersby, including a group of students from Brighton-le-Sands Primary School, who had stopped to watch, sang the first verse of Advance Australia Fair.