NSW Labor prepares to govern as Liberals soul search

NSW Labor is preparing to form government for the first time in 12 years after the party pulled off a definitive victory, shattering the coalition's hopes of a historic fourth term.

Labor leader Chris Minns will be the 47th premier of NSW after leading the party to a decisive victory, taking at least nine seats from the coalition, with a statewide two-party preferred swing of seven per cent.

"Friends, after 12 years in opposition, the people of NSW have voted for a fresh start," the 43-year-old told a jubilant crowd of revellers in Sydney on Saturday night.

Labor is predicted to form a comfortable majority government, after taking western Sydney seats Penrith, Parramatta, Camden, East Hills, Riverstone, and other regional seats including the South Coast and Terrigal.

After 12 years in the political wilderness for NSW Labor, Mr Minns will lead a team of mostly debutantes, with the party tipped to gain at least 47 seats necessary to govern in its own right.

The incoming government brings just two MPs with previous government experience, in former leader and likely attorney-general Michael Daley and Mick Veitch, who is set to take the regional and agriculture portfolios.

Prime Minister Anthony Albanese addressed the jubilant Labor crowd at victory celebrations, saying NSW had chosen a better future.

"Chris Minns has been a great leader for NSW Labor," Mr Albanese said.

"And after tonight, he will be a great premier for the people of NSW."

After the devastating loss, a gutted Premier Dominic Perrottet stunned supporters saying he would step down as leader of NSW Liberal Party, and took "full responsibility" for the loss.

"This next period of time will not be easy, but it will be necessary," he told the party faithful at the Hilton Hotel in Sydney's CBD.

He heaped praise on his opponent in a gracious concession speech, urging people to get behind him whatever their political persuasion.

"I believe he will lead with the same decency of the same integrity that he has led with so far."

Leading contender to take on the job, Deputy Liberal Leader and Treasurer Matt Kean, demured when asked about his prospects.

"It is too early, I haven't thought about it," he told the ABC.

"I have been by Dominic's side during this journey, I have seen how demanding the job is.

"Let me tell you, Dom has put everything into this."

Another likely contender for the top job is Alister Henskens, who held four portfolios in the Perrottet government, and has kept a relatively low profile.