Families and individuals who use the Service NSW website to check if their energy company's rate is competitive would receive the one-off payment to use towards energy bills, Premier Dominic Perrottet said on Sunday.
Households would collect a total of $400 in savings by choosing to change providers.
"We know households are feeling the pinch right now and that's why we will provide immediate bill relief as well as help families get a better energy deal," Mr Perrottet said.
"This is $250 in short-term energy savings whilst at the same time ensuring NSW households can slash their bills into the future.
"This is all part of the Liberal and Nationals long-term economic plan to support NSW families and keep our state moving forward."
The Service NSW site includes a free service that compares electricity and gas services for households and small businesses.
Deputy Premier Paul Toole said the program would help families develop long-term skills to help them save money into the future.
"The hard-working people of NSW deserve to keep more of their hard-earned money and this initiative will help develop habits which will go well beyond the $250 payment," he said.
With the government re-elected next month, the one-off payment would be available from July to be used whether consumers choose to change energy providers or stay put.
It would also be accessible to people who use existing NSW government energy rebates.
It's expected about two million energy users would take up the offer, costing the government about $500 million.
The cash incentive would make it easier for households to switch providers and shoulder the rising cost of living, Mr Perrottet added.
NSW Labor Leader Chris Minns called the incentive a "cash splash" which would be followed by a year of steadily increasing power bills.
"What the government hasn't told you is that it's a one-off payment," Mr Minns said.
"The following 12 months, electricity prices are expected to jump by an additional 30 per cent.
"I think many taxpayers in NSW will be asking, 'Why did you sell off the power stations in the first place?'
"This is an admission that the government's reckless privatisation agenda has smashed household budgets."
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