A major supply-chain investigation has turned up 75 asbestos-contaminated sites, but more could still be revealed from a "handful" of still-pending tests for tainted mulch.
The tracing operation has been completed, with samples submitted revealing a series of positive tests for asbestos in mulch at parks, schools, hospitals and churches across Sydney.
The investigation was sparked after mulch containing fragments of bonded asbestos was detected at the recently opened, inner-city Rozelle Parklands in January.
Over an eight-week period, the state's Environment Protection Authority (EPA) has been working to determine the source of the tainted mulch and how it entered the supply chain.
Around 6500 tonnes of mulch have been tracked down, assessed and tested and nearly 1200 samples have been taken for analysis.
All sites that returned positive results had small levels of asbestos contamination and NSW Health advised the risk to the public was low.
The EPA's criminal investigation into the saga continues.
NSW's government will strengthen penalties for environmental crimes such as asbestos contamination. (Dan Himbrechts/AAP PHOTOS)
Environment Minister Penny Sharpe said while the initial phase of supply-chain testing was complete, a handful of tests were yet to come back.
"It's possible that there might be a handful (more sites) ... but we've gotten to the bottom of what should be tested," she told a parliamentary hearing on Thursday.
The NSW government has also pledged to tighten regulations and strengthen penalties for a range of environmental crimes.
Ms Sharpe said the initial discovery of asbestos in mulch had led to the biggest investigation in the EPA's history.
"Asbestos is illegal in any product and should not be there," she said in an earlier statement.
"The first phase of this investigation is now complete.
"While the EPA works on its criminal investigation, the NSW government will move to tighten regulations and make further changes as required."
"Something has gone wrong in the regulation system and we need to get to the bottom of that."
Premier Chris Minns said a "polluter-pays regime" remained in place and he would wait until the investigation was over before giving a total figure on remediation costs or the potential bill for taxpayers.
Many of the contaminated mulch supplies have been confirmed as being linked to Sydney's Greenlife Resource Recovery.
But Greenlife is challenging an EPA prevention order in court and says it is confident the mulch left its facility free of contamination.
The company continues to be listed as a supplier to the state government on the Buy NSW website.
Finance Minister Courtney Houssos said she would not be calling for the firm's removal until the EPA had finished its investigation.
City of Sydney mayor Clover Moore says the asbestos issue is a major failure of regulations. (Dan Himbrechts/AAP PHOTOS)
City of Sydney mayor Clover Moore, whose council area contains several contaminated sites, said the tainted-mulch scandal was a major failure of regulations.
"We should be able to trust that the mulch we're contracted to receive has gone through all the proper processes and is safe to use," she told ABC Radio.
"It's a real mess and it's a very costly one for everyone involved because these processes we have to go through to ensure our parks are safe are costly."