Officers were previously prohibited from wearing or carrying their firearms into court buildings under a directive from NSW's Chief Magistrate.

But under the current terror threat, officers will be able to arm themselves with their full appointment at all times.

Deputy Premier and police minister Troy Grant said the change in protocol will come into effect next Monday, August 10.

"The change recognises Australia's heightened terrorism alert and the risk posed to the police, judicial officers and the community," Mr Grant said.

"This is a common-sense approach at a time our nation faces a high terror alert and when we've seen police overseas become terror targets themselves," Mr Grant said.

The Police Association of NSW has been fighting for the changes for their members to be able to wear and carry their firearms in court since September last year.

In May this year, the association's president, Scott Weber, argued many members were concerned for their safety following a number of terror-related threats and incidents in Sydney and Melbourne.

"We have seen terrorism related offences in Sydney, current heightened security warnings and subsequent direction for police to carry their appointments due to escalating threats," Mr Weber said.

"Recent events in Victoria involving a direct threat against police officers have meant the risk for police is at the highest levels and all reasonable steps must be taken to alleviate risk."

He said judges, magistrates and court officials could not always control what happened in the "pressure cooker" environment of court houses.

"Some members of the judiciary must be stuck in the past," he said. "Tradition does not dictate no weapons in the Local Court.  It is an archaic system from higher courts and times have changed.  When these traditions developed, there were no credit card knives, no ceramic edged weapons, no 3D printed edged weapons or firearms."

The protocol was signed by the NSW Sheriff and NSW Police Commissioner and was developed in consultation with the Chief Justice of the Supreme Court, the Chief Judge of the District Court and the Chief Magistrate of the Local Court.