The New South Wales Government has abandoned forced council amalgamations, ending an 18-month war with the state's local municipalities.

Premier Gladys Berejiklian made the announcement in Sydney today.

In February, the NSW Government walked away from regional council mergers, saying that municipalities challenging the policy in court would no longer be forced to join.

Today's announcement affects mergers in Sydney, and means the end of the policy.

Ms Berejiklian said the risk of uncertainty during local government elections, scheduled for September 9, left her with no choice.

"I couldn't be in a position where people are going to the polls on September 9 not knowing whether or not their entities are going to continue," Ms Berejiklian said.

"I don't want that uncertainty."

Metropolitan local Governments, including Mosman, Willoughby, North Sydney, Lane Cove, Hunters Hill, Ryde, Strathfield, Canada Bay, Burwood, Ashfield, Ku-ring-gai, Hornsby, Woollahra, Randwick and Waverley will no longer be forced to join.

However, it will also create headaches, with several councils in the city and regions already having merged.

Local Government Minister Gabrielle Upton said Sydney's communities needed certainty.

"The Government remains committed to reducing duplication, mismanagement and waste by councils so communities benefit from every dollar spent," Ms Upton said.

Mergers on the nose with voters

In December 2015, the Government laid out plans for 35 mergers, which would have reduced the state's 152 councils to 112.

However, that blueprint was last year watered down to just 19 mergers.

Woollahra, which takes in some of the city's most affluent areas, has resisted merging. ( ABC News: Riley Stuart )

Woollahra, in Sydney's leafy eastern suburbs, has led the litigation, with a High Court appeal granted in May.

Many others were awaiting separate Supreme Court rulings on merger proposals.

The policy was deeply unpopular in regional areas, and was seen as a major reason behind the Nationals losing the seat of Orange to the Shooters and Fishers Party in a by-election late last year.

The Nationals suffered a swing of more than 20 per cent against them.