Barilaro said he would bring together Hunter community leaders to determine how best to maximise Royalties for Rejuvenation funding to ensure the government protects jobs in favoured industries.

It also "identifies the exciting opportunities that can be built off the back of the mining legacy for decades to come," according to Barilaro, who is also the leader of the NSW Nationals party.

"Coal mining has a strong future in NSW but we need to ensure stability in the long-term and that is why we established the Royalties for Rejuvenation Fund that will see a minimum of $25 million set aside each year to ensure we plan for opportunities down the line in mining towns," Barilaro said.

"It makes no sense for government to tell these communities how and what the future should look like - it is communities and their leaders that are best placed to do that - and the NSW government is here to listen and deliver on those community expectations."

Barilaro announced that Round Eight of Royalties for Rejuvenation had been boosted to $75 million before the Upper Hunter by-election on May 22, which was ultimately won by the Nationals candidate.

He said he wanted to ensure the diversification out of coal by the Hunter region would continue "well beyond a four-year electoral cycle and the expert panel will help drive the necessary structural change through strong independent leadership".

"Demand for coal in our part of the world remains strong, and thermal coal prices are at recent record highs - so we have time to plan for our future sensibly, without causing undue anxiety and fear as we navigate the decades ahead," he said.

"In the coming months we will be reaching out to unions, joint organisations of councils, industry peak bodies and community advocacy groups that are prepared to join the Government in its vision of the Royalties for Rejuvenation Fund."

Lock the Gate NSW coordinator Georgina Woods said: "We're delighted that the deputy premier has made this crucial commitment to a statutory body of local leaders to guide the Hunter region's plans for diversification and renewal.

"We know from experience here in the Hunter and around the world that this is the kind of framework mining communities need to adjust to market change - putting local people in charge of public investment in diversification before disruption occurs."