Member for Barwon Roy Butler, a former public servant, said telework - working online from home - is a huge opportunity to decentralise government departments and create employment in regional NSW.

The move online during the coronavirus crisis ha proven that a massive shift to teleworking in the public sector could work, he said.

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"There's so many people and so many stories I've seen where well-skilled people with a good career have moved out west maybe to get married or moved onto a property or something like that and then their career opportunities just dry up," he said.

He said centralisation of public service jobs had for years forced locals out of the bush into the city, but if employees had the option many would choose to leave the expensive Sydney property market.

The bill would force the state government to assess more than 300,000 positions for suitability for teleworking.

But it's weighted towards working in the regions. It bans a person based in a metropolitan area working in a job earmarked for a regional area, but permits working a Sydney job in a regional area. Mr Butler called that a "one-way gate".

The NSW Government has a policy of asking itself "if not why not" adopt flexible arrangements for public service employees.

But the SFF MP said the policy "hasn't been implemented".

"We've got a policy there that says that it should happen. But the next step, which is to identify the jobs that are suitable for teleworking and advertise them as suitable for teleworking, hasn't happened," he said.

"It's up to the applicant to negotiate remote work at the point they apply for the job, so a lot of people just don't bother applying because they don't think it will be suitable or accepted for teleworking."

The Government Sector Employment Amendment (Teleworking) Bill 2020 is set to be introduced into parliament when it next sits in August.

The bill would force the Public Service Commissioner to assess every single job in the state for suitability for teleworking. It would also require the state government to create an online telework portal with information about teleworking.

Mr Butler worked in the public service for 20 years before winning the seat of Barwon in 2019.

His wife works from home and he says she's much happier and avoids a two-hour drive every day.

The National Party has been contacted for comment.