At a press conference in Sydney on Thursday Mr Baird said he was stepping down from the job after three years as Premier and 10 years in parliament to allow a “refresh” of his government.

And an emotional Mr Baird revealed that a disastrous 2016 for his government that saw his popularity plummet had been coupled with “much tougher” personal challenges.

Mr Baird revealed a deep “personal cost” of the job, saying part of his motivation for stepping down were significant health issues faced by his father, mother and sister.

 “I think now is the right time,” he said.

“There is a strong personal cost that comes in public life and I’ve probably felt that more than any other time in the last few months.

“My father and my mother and my sister are going through very serious health challenges.

“To be honest, at times I have been in pain not being able to spend the time that I should. This will change today.” 

The shock resignation comes just a week before an expected cabinet reshuffle, and after a difficult 2016 that saw his personal popularity slip dramatically in polling.

Last year saw Mr Baird backflip on a previously announced greyhound ban after opposition from both Labor and within his own party.

His government also faced stiff community opposition to its controversial council merger proposals, and lockout laws in Sydney.

And while he said he had faced “tough times” throughout his time in government, the time was right to hand over.

“What’s been clear to my mind is as we approach the halfway mark of this term and indeed six years in government it’s time for us to refresh, to reset our goals to the 2019 election and beyond,” he said.

During the press conference a candid and at times emotional Mr Baird revealed members of his close family had been undergoing significant health issues during a difficult 2016.

Mr Baird’s father, Bruce Baird, a former transport minister and deputy leader of the NSW Liberal Party, recently had open heart surgery, and faced “a long road to recovery”.

His mother, Judy Baird, has muscular distrophy, while his sister, the writer and journalist Julia Baird, is battling cancer.

“My mother has just gone to 24-hour care ... that's very tough to watch as a son,” he said.

“Those personal things obviously impact on you.

“The nature of this job makes it tough to be able to support them as much as you want.”

Mr Baird said he had never wanted to be a “career politician” and said he was proud of what he had achieved during his time in government.

“In my maiden speech I talked about wanting to come into public life to make a difference,” he said.

“I was frustrated by a lack of action and wanted to get things done.

“I said many times I didn’t want to become a career politician, I wanted to go as hard as I could for as long as I could and then step aside.

“Today I am making good on that pledge. I think now is the right time.”

Listing his achievements while Premier, Mr Baird said infrastructure was a “hallmark” of his government, and listed the Newcastle Light Rail project as something that would make the city “very different”.

“This state will never be the same again on the base of what we set out to do with infrastructure,” he said.

“The polls and wires lease is something that will set this state up for a generation.”

In a statement released on Thursday morning, the NSW premier said the halfway mark of the current term of government was the “perfect time” to hand the reins over to a new premier.

Mr Baird said after 10 years in public life it was time to “move on”.

“Serving as Premier of NSW has been a tremendous honour, but I have made clear from the beginning that I was in politics to make a difference, and then move on. After 10 years in public life, this moment for me has arrived,” he said.

“We have repaired the State budget, rejuvenated the economy, created jobs in unprecedented numbers, boosted frontline services and unleashed an infrastructure boom in Sydney and the regions, which everyone can see with their own eyes.

“As a result, the agenda that I entered public life to establish is being implemented. What matters now is that the new Cabinet should have time to settle in and reaffirm its own agenda ahead of the election in 2019 -- because only the Liberals & Nationals can be trusted to manage the continuation of the economic recovery and the infrastructure boom.”

Mr Baird said there would be a a Liberal party-room meeting and a spill of leadership positions next week.

Following that meeting he would resign from parliament effective immediately, he said.

The government’s Parliamentary Secretary for the Hunter, Scot MacDonald, said he was “really disappointed” to hear his boss was quitting.

“[I] thought he was the best Premier for decades, and [the] Hunter has lost a genuine champion,” he said via text message on Thursday morning.  

Treasurer Gladys Berejiklian, Planning Minister Rob Stokes and Transport Minister Andrew Constance have all been touted as possible replacements for Mr Baird.  

Meanwhile unions have been quick to talk down Mr Baird’s legacy.

The Australian Manufacturing Workers Union called Mr Baird’s resignation a “cop out”, saying his time as Premier had “been a disaster for blue-collar and manufacturing jobs in NSW”.

The AMWU’s NSW Secretary Tim Ayres said “thousands of manufacturing workers in NSW have lost their jobs” as a result of Mr Baird’s governments.

“This pain has been most keenly felt in regional areas such as the Hunter and the Illawarra,” he said.

“Unemployment has grown in many regions around the state under Baird’s premiership.

“He’s culpable for the 21 per cent youth unemployment rate in the Hunter.

“Mike Baird did not understand what these jobs mean for the regional communities that rely on them. He has left these communities behind.”

NSW Labor leader Luke Foley wished Mr Baird well, and thanked him for his service.

“I want to wish Mike Baird and his lovely family all the best for the future,” he said.

“I know members of his family are currently battling health problems but I thought this morning that this year Mike Baird will have the opportunity to walk his eldest daughter down the aisle and as a father of girls I couldn’t think of greater privilege,” he said.

Mr Foley said the government was “failing” the people of NSW and needed “more than a new Premier”. 

“I think the job for me and my team hasn’t changed, it’s to hold this gov to account and I think this government needs more than new Premier it needs a new direction because when it comes to the key services of this state that its people rely on they’re failing,” he said.

“We see overcrowding in schools, declining academic standards, the gutting of TAFE, soaring hospital waiting lists and a crisis of housing affordability.”

More to come.