The legislation is returning to parliament after the government committed last year to outlawing historically overlooked coercive control as part of its response to a parliamentary inquiry.
The abuse involves patterns of behaviour that deny autonomy and independence to those it targets, and can involve things like control over finances, communication and contact.
Attorney-General Mark Speakman said "unprecedented consultation" had been undertaken in formulating the bill.
"The fact that it's challenging is not an excuse for doing nothing," Mr Speakman told parliament on Wednesday.
"Coercive control is a proven red flag for domestic violence homicide.
"It is no exaggeration to say this bill could literally mean the difference between life and death."
Nithya Reddy said her sister would still be alive if coercive control had been criminalised before her murder in March 2019.
"My beloved sister, Dr Preethi Reddy, was killed by a former intimate partner who had been non-physically abusive throughout the relationship," she said.
"She did not recognise the danger of this course of conduct as her killer's first act of physical violence was to take her life."
Coercive control is a crime in other parts of the world but the attorney-general says the NSW laws are unique.
"We have learnt from overseas jurisdictions' experiences and built a bespoke offence that best reflects the diverse nature of our society in NSW," he said.
After the state bolstered other laws targeting domestic violence, 28 per cent of court finalisations and 52 per cent of custodial penalties involved Indigenous people, Mr Speakman said.
Indigenous people comprise 3.4 per cent of the NSW population.
"That's why we can't just copy and paste," he told parliament.
"Doing so would exacerbate the tragic over-representation of Aboriginal people in our justice system."
The bill will create a separate offence for coercive control, carrying a maximum seven-year sentence.
Those charged could end up in jail if it's proven they repeatedly and continuously engaged in abusive behaviour involving violence, threats and intimidation, or coercion or control of the other person.
It must also be proven the accused intended to coerce or control, their conduct was likely to cause fear of violence being used, and seriously impacted the other person's ability to go about their lives.
The proposed criminalisation only applies to current or former intimate partner relationships.
NSW Bar Association president Gabrielle Bashir SC says establishing an accused intended to coerce or control is an important part of the proposed offence.
"Setting the bar at intention rather than a lower mental state will limit the spectre of the offence being used as a weapon against the very people that it is designed to protect," she said.
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