From January 1, community preschools across the state who enrol four- and five-year-old children for at least 600 hours in the year before school will receive increased subsidies from the NSW Government.

The $115 million funding injection will allow preschools to reduce fees to an average of $22 per day when a child is enrolled to attend a minimum 15 hours per week.

“Research shows that children who receive a quality early childhood education in the year before starting school are better prepared to transition to school and benefits carry through to adulthood,” NSW Premier Mike Baird said.

Kurri Kurri and District Preschool Kindergarten director Jannelle Gallagher said while it was great to see a reduction of fees, the changes meant the preschool would have to review its operating hours.

She said parents may have to send their child for extra hours, which they might not be able to afford, just to be eligible for the full subsidy.

The subsidy is $6600 per four-year-old child enrolled 15 hours a week.

The Kurri preschool currently receives a subsidy of $4629 per four-year-old child, regardless of how many hours they attend. Many children currently attend 12 hours a week broken into two six-hour days.

“It sounds wonderful, to get our fees down to $22 a day, but lots of centres will need to re-think their enrolment patterns,” Ms Gallagher said.

“I get that they (the government) are trying to drive this, but I’m not sure it’s the way forward. I’m not sure how much choice it is going to give families.”

Minister for Early Childhood Education, Leslie Williams said the government was committed to making a quality childhood education affordable for all.

"We also acknowledge feedback from the Auditor-General who recommended that funding be tied to 600 hours enrolments, and removing the barriers to access,” she said.

"The funding will not only make early childhood education more affordable but will also remove nearly all fees for children from Aboriginal and low-income families at preschools."