Coal ash makes up about 20 per cent of the state's waste stream
The NSW Parliament's public works committee will examine the legacy of coal ash from coal-fired power plants.
It is estimated the pollutant makes up about 20 per cent of the state's waste stream.
Greens Upper House MP Abigail Boyd said NSW residents deserved to know how the government planned to deal with the toxic byproduct.
"We know from sales documents obtained by the Greens that the State Government retains the bulk of the liability for remediating these polluted sites," she said.
"The Greens are concerned that the Government is putting off closing these polluting power stations because that will trigger potentially billions of dollars in clean-up costs."
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The inquiry will also examine the economic and employment opportunities associated with coal ash re-use, site remediation and repurposing of the land.
"NSW needs thousands of good jobs and dealing with coal ash responsibly may provide a win-win for coal communities as well as the environment," Ms Boyd said.
The inquiry will accept public submissions and report by 16 March 2020.