A major Sydney council is shutting childcare centres.

Cumberland Council says it has to close 17 centres across Auburn, Granville, Guildford and Merrylands, after the Federal Government asked them to make the cost of childcare free for parents.

New federal measures will see subsidies paid to childcare centres if the centres stop charging parents fees.

The council says keeping the centres open would mean they run at a loss of half a million dollars a month.

Closing the doors has left 600 families in the area in the lurch.

“Parents are devastated, many of them are essential workers like nurses. They have nowhere to send their children,” Steve Christou, Mayor of Cumberland City Council, told 9News.

The federal government says the average cost of a ten-hour day at daycare should be $120, and has pledged to cover half of this.

However, with fees as high as $180 a day at Sydney centres, this leaves a $120 gap for the centre to cover.

Childcare operators say the new scheme is good for parents, but cannot be sustained long term.

“I'm concerned that many families across Australia won't have services to go to,” Mark Camilleri from Roly Poly Childcare told 9News.