Education ministers throughout the country have decided to delay the full rollout of NAPLAN Online by a year following widespread technical glitches.
NSW, Victoria and Queensland have also agreed to conduct a breakaway review of NAPLAN to determine whether the contentious literacy and numeracy test is still fit for purpose and how it could be improved.
This development came after a national review was knocked back at a meeting of education ministers on Friday.
Federal Education Minister Dan Tehan said a full review of NAPLAN would be premature while two separate reviews into NAPLAN Online and the presentation of data on the MySchool website were taking place.
"Now is not the time to be undertaking a review of NAPLAN....let's get the transition to online done first," he said.
But NSW Education Minister Sarah Mitchell, who had put forward the proposal for a national review, arguing that the tests were flawed and should be revised or replaced, vowed to continue advocating for a change.
Ms Mitchell said it was time for governments to come together and accept the mounting evidence showing NAPLAN needs to be updated.
"The decision made at Education Council today not to support the proposal from NSW for a review of the test is disappointing, however this will not deter me in ensuring there is an appropriate diagnostic test in place for students, teachers and parents right across NSW," she said.
"NSW will work with other states including Victoria and Queensland to progress the review and bring recommendations back to the Council."
Ms Mitchell added that in 2019, a diagnostic test should be on demand, linked to the curriculum and focused on student growth.
The annual NAPLAN tests, which are sat by students in years 3, 5, 7 and 9 have been plagued by controversy since they were introduced more than 10 years ago.
Teachers, students and parents claim the assessments create unnecessary anxiety, extra work and drive unhealthy competition between schools.
In a in-house piece, NSW Teachers Federation president Maurie Mulheron wrote in support of Ms Mitchell's call for a national review of NAPLAN.
"It certainly is time for this flawed test to go. We could do so much better," he wrote.
"However, those vested and commercial interests that have been responsible for NAPLAN over the past decade must not be allowed any role in the development of any new sophisticated assessment tools.
"If assessment, including testing, is to serve the educational needs of children, it must be developed by teachers."