The expert group of hazardous material experts and government agencies was assembled on Thursday to curb the growing scale of the problem.
It will give more resources and support to an investigation by the state's environmental regulator after contaminated material was first found at the Rozelle Parklands in Sydney's inner west in January.
City of Sydney confirmed testing of garden beds in 38 locations with areas to be taped off from Friday morning.
It said it was also testing another 33 parks where contaminated mulch may have been used, including Minogue Crescent Reserve in Forest Lodge, and the process would take several weeks.
"We urge people to avoid taped-off mulched areas in parks and mulched garden beds around their local area as this situation continues to evolve," it said in a statement on Thursday night.
NSW Greens MP and Environment spokeswoman Sue Higginson said the task force will be overwhelmed by the continued movement of asbestos contaminated material across the state unless a temporary suspension is put in place.
"When contact tracing was introduced in response to the COVID-19 pandemic, the government rightly instituted restrictions on movement to avoid the crisis from growing out of control," she said in a statement on Thursday.
"We need the government to take a stand and limit the movement of materials, that are likely contaminated with asbestos, so that contact tracing can do its job and resolve the failed regulation and corrupted supply chain."
Ms Higginson said the public should be assured that asbestos is not in mulch materials before it is allowed to be sent out to places like parks, schools or hospitals.
Mulch laden with asbestos has already been detected in at least 22 sites with some residential properties believed to be among hundreds of sites across Sydney potentially contaminated with the hazardous material.
"I'm sorry to say but the truth of the matter is that the number of (contaminated) properties would be very large right across Sydney," Premier Chris Minns told reporters on Thursday.
Asked if the likely figure for the number of contaminated sites was in the hundreds, Mr Minns said: "Yes."
That was the "worst case scenario" the Environment Protection Authority was working under, it said, while noting nine out of every 10 sites testing so far had been cleared.
"Suffice to say it is a very major investigation, probably the largest in the EPA's history," the authority's chief executive Tony Chappell told reporters.
One difficulty facing authorities is the supplier linked to all 22 confirmed sites distributed its recycled mulch product to 30 companies, some of whom passed it further down the chain.
The EPA recently learnt a handful of regional sites, including in Nowra, and residential properties had received the mulch product.
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