NSW councillors will no longer be able to receive gifts such as free meals and overseas travel under new rules introduced by the state government.

Councillors found to be "misbehaving" could find themselves without pay for up to three months or, in serious cases, face disqualification from civic office.

The rules are part of a new Code of Conduct that covers the state's 152 councils and comes into effect on Friday.

"Sanctions include suspension of individual councillors for up to three months and in serious cases, suspension for up to six months or disqualification from civic office by the Pecuniary Interest and Disciplinary Tribunal," Local Government Minister Don Page said in a statement.

Under the new rules, councillors will be banned from receiving gifts like free meals, gym memberships and travel and from using their positions to gain private benefits.

Councillors could also face punishment if they make politically motivated allegations, the government said.

Last year, the Independent Commission Against Corruption (ICAC) launched a major investigation into the state's councils and uncovered a culture of corruption among councillors.

The ICAC made adverse findings against 21 council staff after they accepted gifts in return for handing out public contracts.

Five council staff were also named in the report for filing fake invoices in return for cash payments totalling hundreds of thousands of dollars.

Mr Page said the new rules were developed after consultation with the community, the NSW ombudsman and the ICAC.

 

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