The City of Sydney celebrations - expected to attract one million people to the harbour foreshore - will top last year's Harbour Bridge display with 1100 additional firework effects lighting up the arches.

More than 100,000 pyrotechnic effects will feature in the celebrations including colour-changing stars, stained-glass designed shells and glittering willow effects.

Letters spelling out Sydney will fall from the bridge as part of the countdown to midnight.

"Sydney's New Year Eve is a demonstration of our diversity and our inclusiveness and we say to everyone - residents, visitors, and especially to those who have sought safety in Australia - you are welcome," Lord Mayor Clover Moore told reporters on Tuesday.

Two million hectares have been burnt since July in more than 7000 NSW fires. Six people have died while almost 675 homes have been destroyed to date.

There have been calls to scrap the NYE celebrations given the scale of the disaster but Ms Moore said cancelling the event would be of "little practical advantage" to those in the bush.

"The fires are horrific and they are an ominous warning of what a hotter, drier climate will mean for our country," the lord mayor said.

But, she added, money has already been spent and people have booked flights, hotels and restaurants for the night.

"At the present time, we're planning to do really a very beautiful choreographed spectacular performance for the 9pm fireworks and for the 12am celebration ... but we will only do it if it's the right thing to do at the time."

The council has donated $620,000 towards drought, bushfire and wildlife appeals and will encourage people to give to the Australian Red Cross disaster relief fund.

A corporate fireworks display on Sydney Harbour was cancelled in mid-November a day after another show was deemed to be in bad taste given parts of NSW were battling unprecedented blazes.

Transport for NSW temporarily banned on-water fireworks while the state was experiencing a week-long state of emergency.

Ms Moore said if there was a total fire ban on New Year's Eve the council "will do what we need to do".

If another state of emergency is declared the council will "be on our toes".

NSW Police assistant commissioner Mick Willing said the threat of terrorism remains after two people were killed by a convicted terrorist near London Bridge in the United Kingdom.

"We have no information at all to suggest there is any specific threat to this year's celebrations, but I do ask that people remain vigilant," Mr Willing told reporters.

Australian Associated Press