Governments have called an end to housing developments on floodplains as a major buyback scheme is unveiled for people affected by catastrophic flooding in the NSW Northern Rivers.

The $520 million buyback scheme is the centrepiece of an $800 million package co-funded by the NSW and federal governments to give 2000 flood-impacted residents the opportunity to raise, repair or retrofit their houses.

For homes in the most at-risk areas of Lismore and the surrounding northern rivers region, governments will offer to buy the home and land from the owner.

Prime Minister Anthony Albanese said the package offered a way forward for communities devastated by repeated flooding this year.

“This is the biggest agreement of its kind, ever, in response to a very significant event,” he said in Lismore on Friday.

But Mr Albanese said governments couldn’t keep allowing homes to be built in harm’s way as climate change fuelled an increase in natural disasters.

“We need to respond as governments, not political parties,” he said standing alongside NSW Premier Dominic Perrottet.

“We need to do better on planning, but we also need to do better than thinking we can just do the same thing over and over again.”

North Lismore resident Brian Burgin said Friday’s announcement was “the best thing I’ve heard”.

“Just the idea that I won’t have to get drowned, it really makes a difference,” Mr Burgin told the ABC.

“I’m just so happy the money has finally come through and that something is going to happen.

“Today is going to be the first step towards getting out.”

Mr Perrottet will lead discussion at an upcoming national cabinet meeting about improving planning to ensure floodplain developments didn’t continue.

He said rebuilding with resilience in mind would avoid past mistakes, adding the days of developing on floodplains in the state were over.

“I’ve already spoken to the planning minister in relation to this,” he said.

“It makes absolutely no sense for us to make this announcement today and then still continue to develop on floodplains – it’s not going to happen any more in NSW, I can tell you that.”

Earlier, he said simply rebuilding devastated communities after natural disasters could not continue.

“I saw first-hand the devastation extreme flooding caused across the northern rivers and I hope this program provides relief for so many residents who have suffered for too long,” Mr Perrottet said.

“We are stepping up to provide options for residents to move out of harm’s way and protect themselves and their families.”

Massive buyback: How it will work

Funding from the program will be open to residents affected by the floods in February and March in the Ballina, Byron, Clarence Valley, Kyogle, Lismore, Richmond Valley and Tweed local government areas.

The voluntary buyback scheme will be offered from Monday to homeowners in the most vulnerable parts of the Northern Rivers, where renewed flooding continues to pose a serious risk.

They will be offered money to raise, repair or retrofit their property, or sell it to the government, based on expert assessments of the damage, its safety risks and potential future flood levels.

“Almost everyone who has been significantly affected and would qualify for this program would have already had an assessment,” Mr Perrottet said.

Those eligible will be given a payment based on a valuation of the home and land.

Up to $100,000 will be available to raise homes and up to $50,000 for retrofitting in cases where flood risk can be mitigated by better building.

The state government will also spend $100 million buying new land in flood-safe locations for new developments with the Northern Rivers Reconstruction Corporation.

-with AAP