The tracing operation has been completed, revealing a series of positive tests for asbestos in mulch at parks, schools, hospitals and churches.
The investigation was sparked after mulch containing fragments of bonded asbestos was detected at the recently opened 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 health risk was low.
While the initial phase of supply-chain testing is complete, the EPA will continue its criminal investigation into the saga.
NSW's government will strengthen penalties for environmental crimes such as asbestos contamination. (Dan Himbrechts/AAP PHOTOS)
The NSW government has also pledged to tighten regulations and strengthen penalties for a range of environmental crimes.
Environment Minister Penny 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.
"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."
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.
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 issue 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.
"(The EPA) have to get to the bottom of where the criminality is and how it has to be stopped (because) it can't be allowed to occur again."
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