Premier Gladys Berejiklian has offered a glimmer of hope that the 9pm New Year's Eve fireworks on Sydney Harbour might go ahead this year.

Sydneysiders may yet get their family-friendly harbourside fireworks display on New Year's Eve, despite the City of Sydney announcing its cancellation.

It would be the second consecutive year the COVID-19 pandemic has forced the cancellation of Sydney's 9pm fireworks on Sydney Harbour before the main event at midnight.

An extraordinary meeting of council will be held within the next fortnight to determine the city's New Year's Eve plans.

Councillor Linda Scott, Labor's candidate for the upcoming mayoral elections, says the decision to cancel the 9pm fireworks and scale back the midnight show was made without consultation with businesses or council.

"The Lord Mayor needs to explain to the world why she has unilaterally scaled back this major event for our global city," she said in a statement.

"The Lord Mayor should publish the NSW Health advice she has received, if any ... and explain why fireworks at midnight are COVID safe, but those at 9pm are not."

A spokeswoman for the City of Sydney on Tuesday evening said the changes were made to make the event resilient in the face of sustained transmission of the COVID-19 Delta variant, despite high vaccination levels.

"The fireworks always generate very large crowds and the two separate displays result in the cross over of large numbers of people leaving for one show and arriving for the next," she said in a statement.

"In the current climate, limiting this mixing of crowds will ensure the event can be managed in the most COVID-safe way for all attendees and staff.

Premier Gladys Berejiklian on Wednesday also offered hope that the 9pm fireworks might go ahead, pointing out the state government had taken over managing the event in 2020.

"I would think that no matter what happens, no matter what situation we are in, the fireworks are always a sign of hope for the new year and the NSW government is considering its options," she said.

The council announcement triggered a backlash from the business community, which said the cancellation would deal a major blow to the Sydney CBD's economic recovery.

Business Sydney said the decision was premature, with vaccination rates expected to be over 80 per cent by December 31.

"New Year's Eve is 102 days away and with the current vaccination rate progressing so well, it seems unnecessary to cancel them now, as businesses in the city were relying on the iconic event to boost recovery after months of lockdown," Business Sydney executive director Paul Nicolaou said.

"The consequences ... will be devastating for hundreds of businesses around the Rocks, Circular Quay and Darling Harbour who were looking forward to recouping some of their huge economic losses throughout this long lockdown."