Premier Dominic Perrottet says the $350 million funding injection to the most devastated areas comes as housing remains "the most pressing challenge for the thousands of people impacted by these floods".
"This $350 million in funding will help get lives back on track, allowing people to move out of emergency accommodation and into more appropriate housing," he said.
The latest support package after federal and state funds totalling $855 million were announced last week, with a focus on Indigenous communities and rebuilding roads.
At least 10 people died from the devastating floods across the Northern Rivers and western Sydney, with Lismore hit the hardest under the onslaught of relentless rain during February and March.
Councils across Tweed, Byron, Ballina, Richmond Valley and Lismore are working with the state government to deliver the 2000 temporary homes
The first confirmed location will be in Wollongbar, in partnership with Ballina Shire Council.
Site readiness and installation works are expected to take about a month.
As well as the modular homes, which accommodate one to four people, other temporary housing options include motorhomes, accommodation at recreation camps, and 16 weeks' rental support.
Planning Minister Anthony Roberts said bureaucratic hurdles had been cleared, paving the way for temporary accommodation to be set up quickly.
"We've cut through the red tape to make it easier for the establishment of temporary homes, including caravans and self-contained vehicles, for up to two years without council approval," Mr Roberts said.
"This was a successful measure after the Black Summer bushfires and we have now extended it ensure flood-affected communities have access to the same provisions to help them in their recovery."