The funding is in addition to the $2 billion package announced by the federal government, which would focus on cash payments to individuals, small businesses and councils, Ms Berejiklian said.
Mr Perrottet said the $1 billion would come from capital reserves in areas across the government.
“We are less focused on the budget and we are completely focused on supporting communities right across the state,” Mr Perrottet said.
“I’ve often said that we don’t run budget surpluses here in NSW for the sake of it, but we run surpluses so we can invest in times like this.
“We don’t just want to see these communities rebuild, we want them to thrive and prosper and that’s why this is an unprecedented response to an unprecedented crisis.”
In addition to the $1 billion, the government will also provide emergency housing help to people who lost their homes in the fires. This will include temporary accommodation, private rental bonds and advance rent payments.
Families and communities minister Gareth Ward said the Bushfire Housing Assistance Service would help those temporarily or permanently displaced as a result of the fires.
“This service will make it easier for residents impacted by these tragic bushfires to access support and secure a home or safe place to stay as soon as possible,” Mr Ward said.
“The NSW government has also established a dedicated bushfire housing assistance response team to proactively support communities that have been devastated by fires in the Illawarra, Shoalhaven and southern NSW region.”
The government’s latest funding announcement tops-up the $231 million already announced this bushfire season, which includes $166 million more for the Rural Fire Service budget, $25 million to help clean-up insured and uninsured homes and grants for primary producers and small businesses.
On Thursday morning, the RFS confirmed almost 1000 home across the state had been destroyed in the nine days of the year so far.
An impact assessment published on Twitter said that of the 1870 homes destroyed across the state this horror fire season, 954 had been lost this year.
A further 196 facilities have been destroyed and 3774 outbuildings.
Twenty people have died so far this fire season in NSW, including RFS volunteers Andrew O’Dwyer, Geoffrey Keaton and Samuel McPaul.
Alexandra Smith is the State Political Editor of The Sydney Morning Herald.
Sally Rawsthorne is a Crime Reporter for The Sydney Morning Herald.