The state government said the entire land area of New South Wales - 800,000sq km was now in drought.
Primary Industries Minister Niall Blair said farmers were enduring one of the driest Southern Hemisphere winters on record.
"This is tough. There isn't a person in the state that isn't hoping to see some rain for our farmers and regional communities," Blair said.
Farm reservoirs have dried up and crops are failing.
Qantas said today it will run two special fundraising charter flights from Sydney to Longreach and Tamworth in October.
These will be operated by volunteer Qantas crew with revenue given directly to Rural Aid's initiatives.
Qantas said it will support its staff to join Rural Aid's Farm Rescue programme and volunteer their time repairing farming equipment, fixing homes and building fences on rural properties around Australia.
Rural Aid collection barrels will be placed in Qantas lounges and at Qantas and Jetstar gates for customers to donate, with on-board announcements to raise awareness.
The airline will also host monthly "Chops for Change" pop-ups at various lounges around the country where guests will be offered gourmet lamb chops in exchange for a small donation.
Qantas chief executive Alan Joyce said the worsening drought had triggered the airline to quickly develop a support package.
"Qantas started in the outback. Many of our staff live there and we have a lot of farming families who supply everything from beef to broccoli that we serve customers. We feel we have a duty to help these communities who are doing it so tough," said Joyce.
Qantas domestic cabin crew member Zanthe Atkinson is one of those who will donate her time for the fundraising flights and understands first-hand the harsh reality of drought.
She and her farmer husband are hand-feeding their stock to keep them alive on their farm near Tamworth, but say they are among the lucky ones as they are able to do so using her supplementary income.
"Most of the farming families have no choice but to rely solely on farm income and for a lot of them there hasn't been any income for years. We can't make it rain but we can at least do our bit to help get them another day closer to the drought breaking," she said.
The drought assistance programme adds to other Qantas Group initiatives designed to strengthen regional communities, drive local economic activity, stimulate tourism and support jobs.
This includes the launch of the Qantas group pilot academy which is expected to drive further activity when it opens in regional Australia next year.
