UPDATE: Greyhound racing has been immediately suspended for a week as the industry comes to grips with a looming state-wide ban.
Greyhound Racing NSW issued a statement saying the industry was devastated by the NSW Government's announcement the industry would cease to exist from July next year.
"Given today's announcement, GRNSW has made the decision to suspend greyhound racing for the next seven days beginning with immediate effect," it said.
"Today is an extremely sad day for the NSW greyhound racing industry and the people involved in it."
ACT Chief Minister Andrew Barr confirmed the territory would follow suit and implement its own ban from July 2017.
GRNSW said efforts had been made to clean up the industry over thee past 16 months.
"GRNSW had taken decisive action as it strived to recover community trust and believed that its reforms and strategic direction could have transformed the sport into a stronger sustainable one in which animal welfare and integrity were fundamental to a vibrant future," it said.
"The industry wanted to do more and was committed in doing so.
"GRNSW would like to reiterate that it fully cooperated with the Special Commission of Inquiry.
"GRNSW will continue to tirelessly advocate for its members and carry on to ensure greyhound racing industry participants receive the support they need as the industry winds down."
12.22pm: NSW Racing Minister Troy Grant said it was a "bloody awful day" but the government could not allow the mass slaughter of greyhounds to continue.
The government has seemed to leave a 12-month door open to lifting the state-wide ban on greyhound racing - but only if the industry can prove it can operate without animal cruelty.
Mr Grant told a media conference an inquiry had revealed a "systemic and perennial cultural issue" across the industry where many people knew what was happening but made no effort to rectify it.
"It's not just the live baiting, but then the slaughter of 10,000s of dogs simply because they didn't meet the muster of a racing dog," he said.
Mr Grant made a "conservative estimate" that up to 60,000 dogs were killed over the past 12 years because they were not fast enough on the track.
"There are a lot of people who have done absolutely nothing wrong," he said.
"They have been let down by their own industry, and (there are) so many of them that rightly have questions to ask and should very carefully read this report."
Mr Grant said there was still an opportunity for the industry to be reinstated before its planned ban in July next year.
He said the government would work with the greyhound industry on a "transition plan" with additional scrutiny to allow it to prove it could function without animal cruelty.
PETA Australia spokesman Desmond Bellamy said governments around the world had banned greyhound racing as more people learned the industry sentenced "highly social and sensitive dogs to life in a cramped cage or kennel, deprived of even a kind word or a gentle touch".
"The greyhound racing industry treats dogs like machines," he said.
"Many are 'discarded' as puppies in the name of 'selective breeding'.
"Others are shot, bludgeoned to death or simply abandoned to fend for themselves when they're deemed too old, injured, slow or exhausted to continue racing profitably.
"By putting an end to greyhound racing, the NSW government is taking a stand against a deadly and cruel industry."
Premier Mike Baird the industry could not continue in its current form.
"Over the coming months, we will consult with the industry to help minimise the pain as best we can for the innocent industry participants as we work towards an orderly industry shutdown," he said.
"We will develop a strategy to work with the RSPCA to manage the welfare of existing greyhounds.
"And the transition arrangement for Greyhound Racing NSW assets (like greyhound racing tracks) will ensure they are used for open public space, alternative sports facilities or other community use."
Queensland has no plans to follow NSW's suit, but the state's Racing Minister Grace Grace said work was already being done to stop live baiting.
"Queensland was the first State to act in response to greyhound live baiting cases last year," she said.
"We acted immediately to stop the sickening abuse that was exposed, and put the greyhound industry on notice that it had to clean up its act.
"Clearly, the greyhound industry is aware that it's on its last chance.
"That's why we've established a new Queensland Racing Integrity Commission to oversee animal welfare across all three codes of racing.
"This is the best-resourced racing integrity body in the country and it will not hesitate to punish anyone involved in animal cruelty."
Queensland's inquiry into the industry, the MacSporran Commission, did not recommend a total ban on greyhound racing.
"Instead, it recommended a stronger integrity regime to ensure animal welfare is front and centre across all three racing codes," Ms Grace said.
"We're in the process of implementing all of MacSporran's recommendations, including a consistent program of monitoring dogs from birth to maturity to ensure that no animal will be able to disappear off the map.
"I want to warn any racing industry participants that do the wrong thing that you will be caught, and you will be dealt with.
"We'll continue to monitor the welfare of all racing animals, and take any appropriate action as required." -ARM NEWSDESK