Landlords who knowingly allow illegal tobacco and vape stores to operate on their premises face prison time as a nicotine crackdown continues.

In its latest push to curb a surging underground tobacco and vape market, the NSW government will move a bill that would punish the landlords with up to one year of imprisonment or a fine of up to $165,000.

"We know that the vast majority of landlords do the right thing - but those bad actors out there not only undermine legitimate business, they also expose communities to criminal activity," Health Minister Ryan Park said.

"This measure will further minimise the opportunities for illegal tobacco and vape sales to flourish."

The new offence that would be created would require the landlord to know an illicit tobacco or vape store was running out

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