New South Wales Premier Mike Baird has announced an overhaul of the state's political donations system.

Mr Baird is waiting for the final report from an expert panel he commissioned to examine electoral funding reform, but said he wanted to bring in changes to clean up the system in time for the March 2015 election.

"The system of political donations in New South Wales is broken, it needs reform," he said.

He announced a doubling of penalties for election funding offences and a maximum penalty of 10 years in prison for using a third-party arrangement to try to skirt the laws.

The statute of limitations for all offences will be extended from three years to 10.

That measure will not be retrospective, so it will not apply to the alleged activities uncovered by recent Independent Commission Against Corruption (ICAC) hearings.

There will be lower caps on donations and more public funding, with a shift to a dollar-per-vote model similar to that used for federal elections.

Mr Baird said he was still keen to see the final report of the expert panel, but was determined to act immediately.

Key points: Broadly double penalties for a range of offences under the Election Funding, Expenditure and Disclosure Act

Broadly double penalties for a range of offences under the Election Funding, Expenditure and Disclosure Act Prohibit third party arrangements being used to avoid donation and expenditure caps – carrying a maximum penalty of 10 years imprisonment

Prohibit third party arrangements being used to avoid donation and expenditure caps – carrying a maximum penalty of 10 years imprisonment Allow for prosecutions for all future offences to be commenced up to 10 years after the offence was committed – up from the current three years

Allow for prosecutions for all future offences to be commenced up to 10 years after the offence was committed – up from the current three years Require parties to disclose political donations received from 1 July 2014 to 1 February 2015

"This package sends the strongest possible message to all current and prospective political candidates – comply with the law or face up to 10 years in jail," he said.

"I share the community’s disgust at what has unfolded at the Independent Commission Against Corruption and am determined to take every necessary step to restore trust in the political process.

"This package puts penalties in place that reflect the serious nature of the offences and are in line with community expectations.

"Breaking donations laws is not an administrative oversight – it is corrupt conduct."

NSW Greens MP Jamie Parker said the changes should have been retrospective.

"That [decision] seems like a convenient dodge so that the Government's members that have been before ICAC won't be subject to these new laws," he said.

Opposition Leader John Robertson said he would try to amend them.

"It would be criminal for this Parliament not apply these laws retrospectively," he said.

It is understood former premier Barry O'Farrell was among a minority in the party room who argued for retrospectivity.

Last week the NSW Government's expert panel said it was unlikely to recommend a blanket ban on campaign donations.

The Government-appointed panel recommended ethics training for MPs, tougher penalties for electoral funding breaches and more frequent disclosure of donations in the wake of revelations at ICAC.

Mr Baird asked the panel to consider a move to publicly-funded election campaigns to reduce the influence of donors.

But the panel's chairwoman, Kerry Schott, said it was unlikely to recommend such a system.

Donations received between July and February 2015 will have to be disclosed and published before voters go to the polls.