In a statement, Morrison announced that NSW Rural Fire Service (RFS) volunteers who are self-employed or work for small or medium-sized companies will be able to apply for up to A$6,000 ($4,189) in compensation from the government, reports Xinhua news agency.
"While I know RFS volunteers don't seek payment for their service, I don't want to see volunteers or their families unable to pay bills or struggle financially as a result of the selfless contribution they are making.
"This is not about paying volunteers. It is about sustaining our volunteer efforts by protecting them from financial loss," Morrison added.
RFS volunteers who spend 10 days or more fighting fires that have affected much of NSW will be eligible for compensation under the scheme.
Morrison said that Australia's other states and territories can request a similar scheme based on their level of need.
However, opposition party leader Anthony Albanese said that volunteer firefighters from every state should be able to access compensation for their service.
About Australian 1,300 firefighters on Saturday continued backburning and strengthening containment lines ahead of worsening weather conditions that are forecast until December 31.
There were currently 82 blazes across NSW on Saturday, half of which were yet to be contained, as a "very high" fire danger warning was in place for much of the east coast, reports The Sydney Morning Herald.
Sydney's temperatures are forecast to climb to 35 degrees on December 31, while smoke haze and temperatures in the low 40s are forecast for the city's west.
( With inputs from IANS )