The multi-agency body will develop the government's "strategic vision" for the area extending from the Bays Precinct through to the Royal Botanic Gardens, including Barangaroo and Millers Point.

Mr Wielinga will also help determine the fate of the Sydney Harbour Foreshore Authority as the new chairman of the agency that was established in 1998 and now controls more than $1 billion in public property in The Rocks, Darling Harbour and Circular Quay.

No deadline has been set for the committee to deliver its overarching plan for Sydney's foreshore, but Mr Wielinga will report back to the government with his recommendations for the future of SHFA next year.

This "review of the functions of the organisation" is a step back from scrapping SHFA outright, an option reportedly considered by cabinet earlier this month.

Planning Minister Pru Goward said the variety of property owners "and the level of duplication" was one of the challenges of developing a plan for the harbour and foreshore.

"Ownership of property on Sydney Harbour's foreshore is like a patchwork quilt," Ms Goward said. "For years there has been no government body with clear responsibility for managing all the different interests, or developing a clear vision for the future.

"That is why a committee is being established to have overarching responsibility for developing a vision for the foreshore and bringing together all the agencies and entities which have an interest, for the benefit of every Sydneysider."

The heads of the Department of Planning and Environment, Premier and Cabinet, Transport for NSW, Roads and Maritime Services, NSW Treasury, Trade and Investment and Government Property NSW will comprise the committee.

It will consult with the community and stakeholders, such as the City of Sydney.

The committee's formation follows major government decisions about Sydney's foreshore, including the sale of all public housing in Millers Point and the plan to open up 80 hectares of land in the Bays Precinct to development.

The opposition's planning spokesman Luke Foley expressed concern about the direction the government was taking, noting the future of the Bays Precinct was being led by the state's property development arm, UrbanGrowth.

"My concern is that the thrust of government policy concerning the Sydney harbour foreshore seems to be directed at development and commercialisation rather than developing the public realm," said Mr Foley, who added the master plan for the Royal Botanic Gardens included a "grotesque visitors' centre near the Man O'War Steps".

Greens planning spokesman David Shoebridge said the new committee added "just another complex layer" to Sydney's planning bodies.

"These ad hoc authorities and this ad hoc carving out of planning powers from the City of Sydney has produced an incoherent planning framework," Mr Shoebridge said

"The better solution rather than creating yet another body would be to return these areas back to the City of Sydney and have one respected planning authority for the whole area."