Labor says it will do everything it can to stop a NSW government decision to implement a 12 month freeze on public sector pay rises.

The move announced by Premier Gladys Berejiklian this week means 400,000 government employees will miss out on their 2.5 per cent pay rise.

The freeze, which applies to all government positions including state owned corporations and departmental secretaries and executives, will save around $3 billion, the government says.

Labor vows to block NSW public sector pay freeze