Synthetic drugs will be outlawed in NSW under new laws that carry jail terms of up to two years and fines of more than $2000.

The drug believed to have contributed to the death of Sydney student Henry Kwan is banned under the new legislation.

The NSW government said the laws are the first of their kind in Australia and will target the manufacture, supply and advertising of synthetic drugs such as synthetic cannabis, cocaine and LSD.

Fair Trading Minister Anthony Roberts said the government would introduce the legislation on Tuesday.

"There is no silver bullet to protect people from the scourge of psychoactive drugs, but the NSW government has developed groundbreaking laws to tackle the problem," he said.