The agreement was signed at a gathering of wine industry leaders who met with a visiting European Union trade mission in the Hunter Valley on Thursday night.

The initiative will provide a much-needed shot in the arm to the NSW industry that has lost millions of dollars in revenue as a result of the Chinese Government's move to impose massive new tariffs on Australian wine.

In addition to increased exports, the new agreement will deliver support measures and commitments with an equivalent value of more than $3 million through to June 2023.

"NSW wine is some of the finest in the world and the agreement we have signed will see the NSW Government and the industry work together to identify initiatives that will help our product achieve even greater success both here in Australia and overseas," NSW Deputy Premier John Barilaro said.

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NSW wine industry makes a $1.6 billion contribution to the NSW economy each year and is a significant employer in regional NSW. It is also a major driver of the state's $38 billion tourism sector.

The Memorandum of Understanding includes the establishment of a new $300,000 regional wine industry fund, which will provide grants to help producers diversify and improve their existing business or cellar door experience. Increasing capacity in regional areas will be a particular focus of the grant program.

"The opportunities from this MOU will help create new jobs in regional areas and increase productivity and profitability, which will boost the sustainable growth of the industry," Barilaro said.

The agreement also commits to the continuation of the NSW Government's viticulture research, development and biosecurity programs, which deliver support to the industry with an equivalent value of $1 million per annum.

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President of the NSW Wine Industry Association Mark Bourne said the Memorandum of Understanding will provide a consistent framework for the continued expansion of the wine industry in NSW, which employs 53,000 people.

"The NSW Wine Industry is a strong industry that covers everything from the planting and growing of wine grapes to the export and promotion of wine both in Australia and abroad, as well as providing local employment in regions right across the state," Mr Bourne said.

"This MOU is great news for the NSW wine industry, following a challenging few years with drought, bushfires, smoke and COVID-19. We thank all those involved in putting the agreement together, including support from the industry at large."

The activities to drive export growth, education and assistance to wine growers will begin immediately, and the Regional Wine Industry Fund is scheduled for rollout from 1 July 2021.

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