New rules will be introduced to ban fishing a Blue Groper by any method, including a hand line, in response to the outcry over the spearing of Gus at Oak Park and another incident at Jervis Bay.
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The change will initially be implemented for a 12-month trial period during which time the Department of Primary Industries will consult with stakeholders and the broader community on longer term policy.
Minister for Agriculture, Tara Moriarty said the government had "heard the community concerns".
"These new rules will make it clear to all water users that these fish should be admired but not targeted," she said.
"With their bright blue colour, alongside their placid and curious nature, there is little wonder why these beautiful big fish are so well loved by our coastal communities."
"While most fishers complied with the previous rules for targeting Blue Groper, prohibiting line fishing will improve compliance by creating the same rules for all recreational fishers and enhance the protection of this iconic fish."
"Education is key in protecting this iconic species, with DPI Fisheries commencing a statewide advisory campaign to ensure all fishers are aware of these new rules."
The Blue Groper has been protected from spearfishing since 1969 and commercial fishing since 1980.
Because of the cultural significance of the species to many Aboriginal people, the changes will not apply to Aboriginal cultural fishing.
Under the new rules, a person found contravening the closure and taking Blue Groper in NSW by any method may face a $500 penalty infringement notice and/or a maximum court-imposed fines of $22,000 or imprisonment for 6 months (or both) for a first offence.
For a second or subsequent offence a perpetrator may receive a $44,000 fine or imprisonment for 12 months (or both).
To Support the changes, DPI Fisheries will undertake education activities, including social media reminders, to increase awareness of responsible fishing practices.
Blue Gropers were made the state fish of New South Wales in 1998 and can be found in shallow coastal waters.