The amendment to the NSW Anti-Discrimination Act 1977 makes it unlawful to "by a public act, incite hatred towards, serious contempt for, or severe ridicule of, a person or group of persons, because of their religious belief, affiliation or activity".

According to the government, the changes bring religious protections in line with existing provisions making vilification unlawful on the grounds of race, homosexuality, transgender status and HIV/AIDS status.

NSW Attorney General Michael Daley, who pushed for the new laws to be passed, said vilification on the grounds of a person's religion was completely unacceptable in our community.

"We are lucky to live in a harmonious society that values respect, tolerance and inclusivity," he said.

"Now we have a clear law to protect people from public actions that incite hatred or serious contempt or severe ridicule of them on the basis of their religious belief or lack of belief."

When Mr Daley first introduced the proposed changes to parliament earlier this year they received pushback as potentially stifling debate.

Civil Liberties Council president Josh Pallas expressed concern at the time it could become illegal to criticise religious institutions such as the Catholic Church, Hillsong or the Church of Scientology as it could be seen as vilifying individual followers.

Last month, Mr Daley revealed he had referred the state's Anti-Discrimination Act 1977 to the NSW Law Reform Commission for review.

The government said a wide range of stakeholders were consulted before passing the latest amendment.

Interfaith representative group Better Balanced Futures hailed the bill's passing, as "a significant day for religious communities in NSW".

"This important legislation enhances equality, and ensures that religious vilification has no place in our cohesive and multicultural state," co-chairs Surinder Jain and Darren Bark said in a statement on Thursday night.

"It also sends a clear and unequivocal message to those who seek to promote hate and vilification - the law is no longer on your side."

Australian Associated Press