Roads Minister for NSW, Duncan Gay, announced that anyone caught with a blood-alcohol concentration of 0.150 or above twice within five years can expect to have the device fitted to their car.
An alcohol interlock is an electronic device fitted to a vehicle’s ignition system.
The driver must provide a breath analysis by blowing into the device, which then prevents the vehicle from starting if the driver has been consuming a certain amount of alcohol.
Mr Gay said legislation would be introduced into NSW parliament next year, which also includes additional penalties for drivers who exceed their demerit point limit.
"Road safety experts estimate the introduction of mandatory interlocks will prevent at least 140 alcohol-related crashes, six fatalities and 102 injuries in the first five years alone,” Mr Gay said.
"We also believe there will be about 500 fewer drink driving offences per year across the state once mandatory interlocks are introduced."
In addition to an alcohol interlock, drink drivers convicted of a second or subsequent offence within five years will also be required to pass a driving knowledge test.
An alcohol interlock program currently operates in NSW on a voluntary basis with only 700 drink drivers currently participating in the scheme.
That number could jump to 8,000 people per year under the new laws, which require interlocks to be fitted to an offender's vehicle for a minimum of 12 months.
Mr Gay congratulated the NRMA, who lobbied for the introduction of the devices.
NRMA President Wendy Machin said the new policy would improve road safety.
"An NRMA survey found 80 percent of people ranked tougher penalties for dangerous and repeat drink driving offenders as the top priority to keep roads safe; this policy shows that the Government has listened to the public," Ms Machin said.
"When you consider that 17 percent of drink drivers reoffend, it’s clear we need tougher penalties and that’s why the NRMA first proposed that this policy be introduced last year.”
Additional penalties will also be introduced for drivers who exceed their demerit point limit twice in five years, requiring offending drivers to re-sit the NSW Driver Knowledge Test and complete a driver education course.