HIV transmission in NSW will be virtually eliminated in five years if a new government strategy is effective.

The plan, announced by NSW Health on Monday, will target priority populations, with additional efforts to prevent, test and treat the virus.

Some 206 NSW residents were diagnosed with HIV last year, a decrease of one third compared to the five-year average.

Only about a third of the newly diagnosed people had shown symptoms for longer than 12 months, meaning they had also sought help earlier.

The decline in the HIV rate was partly driven by the effects of the pandemic, including restricted movement and less casual sex.

More than $105 million has been spent on limiting the spread of HIV in the past five years, with the increased use of anti-viral drug PrEP particularly instrumental in bringing transmission rates down.

Health Minister Brad Hazzard said elimination of the virus is possible.

"These innovations mean that the virtual elimination of HIV transmission in NSW, once inconceivable, is now a realistic and achievable goal," Health Minister Brad Hazzard said.

The virtual elimination of HIV transmission between mother and child, among people who inject drugs, and among female sex workers has already been achieved.

Authorities are now turning their focus to men who have sex with men, particularly those from culturally and linguistically diverse backgrounds, under the age of 25 or living in regional NSW.

Men in these categories have not seen the same improvements in prevention, testing and treatment.

NSW Health will aim to reduce the time between arrival in Australia and HIV testing for all at-risk people born overseas, address barriers to testing and treatment caused by stigma, and expand the number of doctors who can prescribe PrEP.

NSW Chief Health Officer Kerry Chant would also like to see the broader at-risk population improve testing rates and PrEP use, after a reduction during the pandemic.

The state's leading HIV health organisation ACON welcomed the new strategy.

"The large decrease in new diagnoses, particularly among gay and bisexual men - the population group at most risk of HIV transmission - is extremely encouraging and shows our collective HIV prevention efforts are working," ACON said.