Motorists in the world's most tolled city are breathing a sigh of relief with a popular rebate scheme being permanently extended.

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Hundreds of thousands of drivers had been claiming about $8 million a month in rebates under NSW Labor's $60 weekly toll "cap" scheme.

But as the two-year scheme's end date of December 31 approached, the state government on Tuesday confirmed it would continue indefinitely.

The scheme helps ease household budget pressures, particularly in western Sydney whose drivers bear the brunt of Sydney's network of tollways.

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