Mr Rees said that from 2010 all students in NSW would complete year 10.

"In addition, if a student is under 17 and wants to leave school after year 10, they will need to be in vocational training, an apprenticeship or paid employment for more than 25 hours per week,'' he said.

"The evidence is clear ... good education means better chances in life.''

Mr Rees said research had shown, on average, early school leavers earned lower wages over a lifetime and were more likely to be unemployed for periods.

The Australian Bureau of Statistics had found early school leavers were 2-1/2 times more likely to be unemployed.