The New South Wales Government has announced a number of social housing reforms which it says will deliver more properties and provide better opportunities for vulnerable households.

It launched a 10-year reform program with the aim of increasing the use of private rental assistance products offered in the state by 60 per cent to help vulnerable households avoid or leave social housing.

It says $22 billion in construction activity will be generated.

Social Housing Minister Brad Hazzard said the Government would engage the private sector to help build more than 23,000 new and replacement social and affordable housing properties, generating $22 billion in construction activity.

Mr Hazzard said the community owned large estates of public housing but the buildings were getting old.

"What we plan on doing is getting the private sector involved to build thousands of new public houses, but at the same time they'll also be able to mix it in with private housing," he told the ABC.

Mr Hazzard said the Government wanted to change the "make up" of the community "so that we don't have these large public housing estates where social disadvantage is so prevalent".

"So that young people growing up can see that other people do go to work and that other people do actually go and get educated, and try and make sure that they have aspirations for greater things in life," he said.

"This is about making sure that those who can do it, do it. But those that can't because of other issues like mental health issues and disability issues are well looked after."

Mary Perkins from Shelter NSW is concerned about the plan to demolish some existing public housing.

"Our private rental market is neither secure or affordable for rental households," she said.

"The devil in the detail is that you could be that you end up losing the stock in the long term, and its availability to low-income households."

Opposition spokeswoman for housing Tania Mihailuk said it would cause upheaval for existing public housing tenants.

"What this Government is saying is out the door you go. Try your luck in the private rental market," she said.

Millers Point sale to add to Government's coffers

Public Housing homes across Millers Point were last year earmarked for sale. ( 702 ABC Sydney: John Donegan )

Overnight, the Government also announced an iconic property in inner Sydney had been put on the market, with proceeds from its sale to be redirected into new social housing projects.

Darling House, a 10-bedroom sandstone building at Millers Point, was built in the early 1840s and has most recently been used as an aged-care facility.

It will go to auction on February 25.

The Government came under fire last year for selling off 300 public housing properties at Millers Point, evicting the tenants and pledging to use the proceeds to build more public housing.