NSW will commit $4.3 million to assessing drug samples at high-profile music events, after its government found a year-long trial delivered unique value when integrated with harm reduction programs.
NSW Health Minister Ryan Park continued insisting the move was not his government condoning any illicit drug use.
"This does not pretend it is safe," he said.
Instead, the decision offered another strategy for reducing drug harms, Mr Park said.
Community organisations widely supported the move but said the state government should go further.
Uniting Church advocacy director Alice Salomon pushed for wider community-based drug checks.
"People who use drugs, don't only do so at music festivals… everyone who uses drugs deserves access to the harm reduction services that will help keep them safe," she said.
Will Tregoning, chief of reform organisation Unharm, agreed and noted the majority of MDMA-related deaths occurred outside music festivals.
NSW Health will tap up to 15 music festivals per year to participate in the scheme, to be decided by the probabilities of drug-related harm.
Chemists from the body's analytical unit will test substances and a community health organisation will offer harm reduction advice.
Amnesty bins will also be available at testing sites.
The decision followed a 12-month trial that ended in February which tested more than 1500 drug samples.
Jennie Ross-King - whose 19-year-old daughter, Alex, died from an MDMA overdose at a music festival in 2019 - said the move reflected reality.
Young people would inevitably take risks despite parents' warnings, she said.
"[But] they should never have to pay for one decision with their life."
NSW Opposition Leader Kellie Sloane rejected the idea a short while later.
"The way we save lives is to send a very clear and unequivocal message," she said.
Police Minister Yasmin Catley on Wednesday said enforcement supported the government's vision for harm minimisation.
But officers will continue to deploy sniffer dogs at music festivals, she said in spite of suggestions police dogs could cause risky behaviour.
Redfern Legal Centre's Rian Terrell said testing would be more effective without drug dogs present.
"Having police and drug dogs at festivals where pill testing is available will deter young people from getting their pills tested, undermining the harm reduction outcomes of the scheme," he said.
Community pill testing is already in place in the ACT and Victoria, with mobile testing also available at certain events.
Queensland became the first state to ban pill testing altogether last year.
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