NSW Opposition Leader Luke Foley said Santos will not be allowed to produce CSG at its exploration site in the Pilliga Forest if Labor wins the state election.
Foley said water contamination risks had led to the decision.
"There's some parts of the state that must be off limits to coal seam gas permanently, and the recharge zone for the Great Artesian Basin has to be one of them," he said.
Santos said its exploration activity would not affect water resources.
"We don't affect the recharge of the Great Artesian Basin, so it's an entirely safe and sustainable project," Santos Energy NSW general manager Peter Mitchley said.
"Coal seam gas has no more risk than any extractive industry. I'm still at a loss to understand the policy."
Mitchley said Labor should not make assumptions about its project before reviewing the company’s environmental impact statement.
"I wish people would wait to see the environmental impact statement and judge the project based on that, rather than leaping to conclusions without knowing what we're trying to do."
Santos has been exploring for CSG in the Pilliga since November 2011, and has recently been dogged by a spate of pollution incidents.
The allegations date back to 2011 when Santos was a shareholder of Eastern Star,a company it took over in November of the same year.
When Santos took over drilling sites in the Pilliga woodland it released a report detailing more than a dozen incidents of pollution which it says occurred under the previous operator.
Many of the breaches had not been previously reported, including a spill at the Bibblewindi Water Treatment Plant which has since been decommissioned and removed.
There were 16 spills or leaks of contaminated water from the series of about 30 "test wells" in the region.
Incidents included serious spills of saline water into woodland and a creek, to kangaroos drowning in a water storage area, both of which were not reported.
As part of its work in NSW, Santos plans to drill 15 exploration wells in the Pilliga State forest and restart existing pilots that have been shut in since Santos took over Narrabri operations in 2011.
The company was granted permission to drill a further eight exploration wells in the region in September 2013.
Both projects have been at the centre of protests from the local community who claim gas exploration will cause environmental harm.
Wilderness Society Newcastle Campaign Manager Naomi Hogan welcomed Foley’s vow to ban CSG production.
“Luke Foley is showing courageous leadership by ensuring the Pilliga and our most important recharge zone for the Great Artesian Basin are protected from polluting coal seam gasfields,” Hogan said.
“Labor’s announcement leaves Premier Mike Baird out on a limb in wanting this environmentally disastrous and hated project to go ahead. It’s time everyone got on the same page to end this fiasco.”