The Newcastle Herald reported on Wednesday that the state government would stop funding the $55 million program on June 30, leaving its 400 staff and tens of thousands of clients in limbo.

But Disability Services Minister Ray Williams announced on Wednesday afternoon that the NSW and federal governments would commit a total of at least $40.1 million in 2019-20 to keep the program afloat.

"The NSW Liberals and Nationals government is committed to ensuring people with disability across NSW continue to receive the supports and services they need to live the best possible life," Mr Williams said in a statement.

"We welcome the Commonwealth Government’s commitment of more than $20 million in 2019-20 to ensure Ability Links continues to deliver services for people with disability across NSW.

"The NDIA’s Information Linkages and Capacity-building [ILC] program will also fund $8.5 million for Aboriginal Ability Links in NSW in 2019-20.

"To ensure the same level of service continues to be delivered to people with disability and their families while the NDIA’s Information Linkages and Capacity program is fully rolled out, the NSW Liberals and Nationals government will invest up to $11.6 million in the Ability Links program in 2019-20."

The statewide program began in 2013 with a trial in the Hunter region before being expanded across NSW.

It links people with a disability with education, employment and community-engagement opportunities and is designed to cater for those who do not qualify for the National Disability Insurance Scheme.

The NSW Department of Family and Community Services said this week that the NDIS's ILC program would offer similar services to Ability Links.

But an industry source told the Herald the NDIS was not yet equipped to cater for Ability Links clients and little planning had been done to shift its activities under the NDIS umbrella.

Ability Links is run by the St Vincent De Paul Society in the Hunter and Central Coast and by other organisations elsewhere in NSW.

Vinnies NSW chief executive officer Jack de Groot welcomed the funding reprieve "and the opportunity to continue to deliver this vital service in the Hunter and Central Coast region".

"Ability Links has facilitated real change for people with disability, their families and carers since its establishment in 2013," he said.

"At a community level, Ability Links has achieved improved accessibility, improvements in social inclusion, education and training and engagement with mainstream services.

"Through raising awareness in local communities, Ability Links has assisted to identify and fill gaps in local service provision, which has led to huge improvements in quality of life.

"Ability Links has provided an important safety net for people with disability experiencing social and economic vulnerability and exclusion, as well as its critical focus on building social capital for eligible and ineligible NDIS participants."

A three-year evaluation by consultants Urbis said Ability Links was "ground-breaking" and delivered positive economic and social benefits.

“In 25 years of evaluating government initiatives, I have rarely come across a program that has achieved so much in such a short space of time," Urbis economic and social advisory director Alison Wallace said when releasing the report two years ago.

“People with disability, their families and carers highly value Ability Links and told us countless stories of the positive impact it has had. The evaluation clearly shows that people’s lives really are being changed."

The Urbis report said the program had been particularly successful in Aboriginal communities and more than a quarter of the people accessing Ability Links were indigenous.

The report said Ability Links and an associated Early Links program for those aged under seven were helping 43,533 people a year across NSW, including families and carers.