The centre - being built on the doorstep of the 24-hour international Western Sydney Airport - has been plagued with construction issues and will likely take decades to be completed.
Industry and local representatives have lambasted progress on the jobs and logistics hub, saying it won't be ready for the scheduled opening of the airport in 2026.
Premier Chris Minns on Wednesday conceded a more streamlined approach was needed.
"This is all part of our plan to put an end to the years of obstruction and delay that slowed down the delivery of essential infrastructure across western Sydney and NSW," he said.
"Delays to the delivery of essential infrastructure (have been) exacerbated by a lack of coordination."
Under the overhaul, the state's infrastructure co-ordinator general will oversee housing and road building around the airport and the delivery of freight, logistics and jobs in the area.
Responsibilities will be shifted to Infrastructure NSW from the Western Parkland City Authority, which will be renamed the Bradfield Development Authority and focus exclusively on the development of the Bradfield town centre.
"Currently, priorities and delivery time frames on projects can differ significantly between agencies, which is creating unnecessary red tape and unacceptable delays," the state government said in a statement.
Planning Minister Paul Scully, who previously defended the speed of work around the airport, said there would be "whole-of-government coordination" on infrastructure decision-making.
The Western Sydney Leadership Dialogue said the decision means the planned 114-hectare city centre would be better placed to attract investment and generate jobs.
"This streamlined approach to delivery will help the 'aerotropolis' take off," chief executive Adam Leto said.
