“I am relieved that nobody lost their life, however with such devastating property loss and damage we need to help people rebuild and the community recover,” Ms Berejiklian said during a visit to town on Monday.

The amount will cover the removal of asbestos-contaminated material, dangerous debris and concrete slabs.

“This [the rebuild] will take, not weeks, not months, but years. Particularly where homes have to be rebuilt and people are starting from scratch,” recovery coordinator Euan Ferguson said.

Martin Dwyer, chief emergency engineer at NSW PublicWorks, who will coordinate the clean-up operation, said air monitoring and asbestos testing will conclude this week, and urged residents with damaged properties to organise neighbourhood groups before contacting the recovery centre and council with insurance details.

He said recent rain was not at levels that could see asbestos spread to neighbouring properties or waterways.

Bega MP Andrew Constance joined Ms Berejiklian at Tathra Headland on Monday morning to make the announcement, and said the move is about “ensuring people’s premiums go to the rebuild, not the clean-up”.

“A guy yesterday told me he’d lost everything, and he was under-insured,” Mr Constance said.

“This is a community that’s in no shape cursed, it’s blessed with wonderful people, and it’s one of the strongest communities you’ll ever see in Australia.”

Council’s general manager Leanne Barnes said the organisation has been working since the fire to “make it safe, and focus on the demolition and rebuild process”.

“We’ve already started planning to increase tip capacity, and start the asbestos clean-up,” she said.

The announcement also saw the state government promise a tourism promotional boost of $100,000 for breakfast television weather crosses, digital marketing and social media advertising, and $1.2million to build a new coastal walkway along the headland.