The Cahill Expressway will be temporarily closed to vehicles for seven days from December 31 to make way for the Elevate Sydney Festival.

Markets, performers and big screens will entertain visitors during the day, with live acts and pop-up food and bar experiences available into the night.

More than 180 artists including Tones And I, Tim Minchin, Baker Boy, Electric Fields, Marcia Hines and The Wiggles will grace the stage, with the event to also feature the biggest drone show in the Southern Hemisphere.

The festival will officially open on New Year's Day and run until January 6 and is free, but tickets are limited to 30,000.

"The day after the fireworks, this event will begin the new year with a celebration of what makes our city great," NSW premier Dominic Perrottet said.

"Nowhere else could you hold this kind of event, nowhere has our harbour, our setting or our weather.

"This has been a tough time for hospitality and tourism, we're committed to doing everything we can to get these industries back on their feet and ensuring that our people have the chance to enjoy the city again."

Australian Associated Press