Express ferries are expected to link Parramatta to the Sydney CBD in less than an hour under a service due to begin later this year.
The NSW government is spending $4 million over two years to set up the service, which will run hourly between 7am and 7pm on weekdays and from 8am to 6pm on weekends.
Premier Nathan Rees believes there is community demand for the ferries, despite a lack of interest from the private sector.
He described the move as a "terrific shot in the arm for public transport in the western suburbs".
"As someone who lives nearby, the local community here has been wanting the service for some time," Mr Rees said while launching plans for the service at Parramatta wharf.
He said commuters would be able to enjoy the Parramatta River's "million-dollar views" every day on the ferry service.
Unlike most ferries, the Parramatta-city link will begin and end at King Street Wharf instead of Circular Quay.
The service, expected to take less than 55 minutes, is due to be running by year's end.
At present ferries have to slow down in the upper reaches of the river because of the wash caused by its shallowness, which has prompted environmental concerns.
The express service will make up time by reducing the number of stops.
But Opposition Leader Barry O'Farrell doubts the government is serious about the service, saying the coalition introduced Parramatta ferry services almost two decades ago.
"It's been 14 years of Labor running it into the ground that raised these question marks," he said.
"It will take more than fine words to convince people in Parramatta they're about to get the ferry service they deserve.
"It's (Labor) has run down the Parramatta River ferry service - the Premier deserves no accolades today for finally doing what (Labor) should have done 14 years ago, which is back this important service to Sydney."