The NSW government will toughen the state's dog laws, including introducing a new category of menacing dogs, following a recent fatal attack on a toddler.

The changes follows the death of two-year-old Deeon Higgins, who was mauled by his cousin's bullmastiff in Deniliquin in the state's southwest this month. The dog had not been considered dangerous before the attack.

Councils will be able to order the owners of dogs that have not attacked but are deemed aggressive to have their dogs desexed, wear a muzzle and never to be left alone with someone under the age of 18, The Daily Telegraph has reported.

Owners who ignore the tough rules for dogs categorised as menacing, dangerous or restricted will face maximum jail time of five years if their dog then attacks.

Under current legislation a dog has to attack before it can be declared dangerous.

"This is a more proactive approach that is followed in other jurisdictions," Local Government Minister Don Page told the newspaper.

Fines will increase to a maximum of $77,000 from $55,000 for owners who fail to comply.

The NSW government originally received recommendations for tougher dog laws from the Companion Animals Taskforce in February, the Telegraph said.