Mike Baird, a former investment banker became the 44th Premier of New South Wales in April 2014, following the surprise resignation of Barry O'Farrell
Mr O'Farrell quit the job after what he called a "massive memory fail" involving the gift of a $3,000 bottle of Grange wine.
In an emotional news conference in Sydney, Mr Baird told reporters that after 10 years in public life, three years as Treasurer and three years as Premier, now is the right time to go.
"There is a strong personal cost that comes in public life and I probably felt that more than any other time in the past few months. My father and my mother and my sister are going through very serious health challenges and to be honest at times I have been in pain not being able to spend the time that I should."
His father, who was the primary carer for his mother who has muscular dystrophy, has gone through open-heart surgery, and his sister has had a re-occurance of cancer.
While admitting politics over the past few months has been tough, he said family issues had been a lot harder.
"To be honest I have at times been in pain at not being able to spend the time that I should. And this will change, today."
He spoke of the economy, infrastructure, education and social welfare as his key legacies to the state.
"When I set out on the journey I was frustrated on why New South Wales was behind the rest of the country. I was frustrated that nothing ever got built and I wanted to make a difference. And as I look at that now, I strongly believe that we have.'
However, Mr Baird has faced criticism for issues including a controversial greyhound racing ban, and lock-out laws that divided public opinion.
Some of his critics nicknamed him "Casino Mike", because Star City Casino and Crown Sydney at Barangaroo were exempt from the lock-outs.
Mr Baird's retirement also comes two months after the shock by-election defeat for the Liberal National Coalition in Orange.
That was largely blamed on a backlash against his Coalition government's greyhound ban plan.
Mike Baird says he also regrets that a renewed push for national tax reform failed.
But in a video message Prime Minister Malcolm Turnbull led praise from both sides of the political divide for his contribution.
"You've played a great innings, and we thank you for it. You've opened your heart and explained why you were retiring all too soon. We understand that."
Labor leader Bill Shorten echoed the message of support, saying politics takes its toll.
"I think it's fair to say and most people would agree with me, that Mr Baird was probably the most talented liberal at the state level in New South Wales. So the Liberal party today in New South Wales is a much more diminished political party than it was yesterday. I suspect this has implications for Mr Turnbull's support in New South Wales as well but I'd like to finish where I start, I wish Mike Baird well and no doubt the Liberal party will be regretting his departure."
