Dapto and Warrawong fire stations could face temporary closures within days, the Fire Brigades union said.
The warning came as the State Government moves to slash sick leave and overtime budgets.
The two stations are likely to be caught up in $70 million worth of cost-cutting, with Fire and Rescue NSW targeting sick leave and overtime costs.
Fire Brigade Employees Union state president and Dapto fire station chief Darin Sullivan said the cuts would mean an existing system, under which off-duty firefighters are called in to cover sick colleagues, would be scrapped in the short-term in favour of shutting stations temporarily.
"If Dapto or Warrawong fire station was offline, then that's obviously a reduced fire coverage and a risk to the community in those areas," he said.
Even if the union could ensure the two stations stayed open, it was likely a water tanker in Wollongong would be taken offline during staff shortages.
The tanker was only introduced a few months ago.
"It's also a reduced resource for the entire Illawarra - those appliances don't just serve the local community of those areas, they respond to all large fires and incidents in the Illawarra," he said.
Mr Sullivan said firefighters were unlikely to find out the full impact of the changes to sick leave coverage until after they were implemented.
"I don't think we'll find out until they start taking [stations and appliances] offline," he said.
In a letter to the fire brigades union, Fire and Rescue NSW Commissioner Greg Mullins said there was a need to rein in "very high levels" of sick leave and review overtime.
Firefighters were also previously facing cutbacks to the NSW WorkCover compensation scheme, including loss of payouts for injuries suffered while travelling to and from work. But the State Government exempted them from those cutbacks after a day of industrial action in June.
Mr Sullivan said there were no immediate plans for more industrial action.