Sydney's Gay and Lesbian Mardi Gras will be revamped after a funding boost from NSW taxpayers.

New government body Events NSW has been in negotiations with Mardi Gras organisers since its establishment in September last year.

Events NSW chief executive Geoff Parmenter confirmed the funding on Thursday, but remained silent on the amount, described only as a "significant investment".

He said the Mardi Gras, which started in 1978 as a protest march for gay pride, had grown into one of the biggest events on the Australian calendar.

"It has been estimated that the Gay and Lesbian Mardi Gras generates more than $30 million of direct economic benefit for NSW each year and it has become an international showcase of Sydney's diversity," he said in a statement on Thursday.

"In support of the agreement we will develop national and international marketing strategies in conjunction with Tourism NSW to ensure tourism visitation is maximised."

New Mardi Gras chairman David Imrie said the strategy included plans for more international and national float participation and securing existing and new media broadcasting opportunities.

"Parade, Fair Day and an enhanced arts and cultural festival will be pillars of a new, self-sustaining, creative approach focused on improving participation, content and production values," Mr Imrie said.

Until now, the event has relied on money raised from the Mardi Gras Party and Sleaze Ball and sponsorship.

The event overcame financial difficulties in 2002, when organisers were forced into voluntary administration, to post a $483,695 profit this year.

Mardi Gras chief executive Anna McInerney said the event attracted interstate and international visitors.

"It's time to drive even greater national and international recognition of Mardi Gras and its vibrant, energetic expression of our Aussie larrikin personality," Ms McInerney said.

"The envy of other global cities, this unique, Australian tradition has endeared its way into the heart of the city and continues to deliver economic and marketing returns for NSW."