The identification of the Permian–Triassic boundary (PTB) and Permian–Triassic mass extinction event (PTME) in eastern Australia is based primarily on palynological and plant fossil evidence with limited δ13Corg data from the northern part of the Sydney Basin. Consequently, the PTB in the Sydney Basin has been placed at the top of the last Permian coal measures. Here we report carbon and nitrogen isotopic data, together with major element, trace element and mineralogical data, for a continuous non‐marine Permian–Triassic (P–Tr) section from the southern Sydney Basin. The PTME is identified by a negative shift in δ13Corg of ~ 3.8‰ occurring approximately 1 m above the Bulli Coal seam. Lack of correlation between δ13Corg and TOC indicates that the isotopic signature has not been affected by contamination or diagenetic processes. The interrelationships between C, N and S data indicate severe environmental disruption and increased weathering at the time of the extinction event with die off of terrestrial vegetation and the injection of sulphuric acid into the water column. Positive excursions in Ni, Cr, and Co are coincident with the negative δ13Corg shift and are most consistent with a reduction in oxygen availability due to a major volcanic eruption.