The NSW Government has announced it will release land for 10,000 homes to be built in Sydney's north-west with another 3000 in the south-west.

The agreements were reached under the "precinct acceleration protocol" with the two landowners.

The plan includes an1800 hectare site at Marsden, predominantly owned by Wintern property group, to contain 10,000 medium density homes.

Building is expected to start in about two years with the remaining 800 hectares set aside as open space

The development industry welcomed the news, the Urban Taskforce's chief executive Aaron Gadiel saying it is an important step.

It means the land will be formally declared "released" and enables more detailed precinct planning to occur. However, an actual subdivision cannot take place until precinct planning has been completed, land rezoned and development approval granted.

"In itself today's decision does not guarantee that new houses will be built," Gadiel said.

"However, it is an important step forward for these two areas.

"The challenge that the government and local council now have is to complete the precinct planning swiftly, so that an actual rezoning can occur.

"Under the former government, the precinct planning process was known to meander for years.

"Twenty months ago, the former government 'released' five precincts in the growth centres, and yet none of them have been rezoned."

Gadiel said that Sydney desperately needed a stronger housing supply, and this had included more detached houses on their blocks in Western Sydney.