A same-sex marriage bill is being debated in Australia's House of Representatives and is expected to comfortably pass before Christmas after the upper house Senate last week overwhelmingly voted in its favour.
It followed Australians emphatically endorsing gay marriage in a recent nationwide postal vote. Sydney is known as the gay capital of Australia and next year also marks the 40th anniversary of its iconic Gay and Lesbian Mardi Gras.
"This (rainbow waterfall) is a fabulous way to see out 2017 -- the year that four out of five Sydneysiders said a resounding 'yes' to marriage equality," Sydney Lord Mayor Clover Moore said.
Australia MP proposes to gay partner in parliament
Sydney's New Year's Eve fireworks -- which take 15 months of planning and cost an estimated Aus$7 million (US$5 million) -- are billed as Australia's largest public event.
More than one million spectators pack the harbour front to watch the spectacle and a further one billion people tune in on television. The Foti family have been the brains behind the world-renowned visual extravaganza for two decades.
"The challenge this year was to create never-before-seen displays," said Fortunato Foti. "This waterfall effect is a first for the bridge and we've chosen the rainbow colours that work best for fireworks: red, yellow, green, blue, purple and silver."
There will also be a tribute marking the 50th anniversary of the Sydney-San Francisco sister city relationship. More than eight tonnes of fireworks will go off on the night, one tonne more than last year, with 30,000 showering comets and 13,000 shells lighting up the skies.
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