Gladys Berejiklian has become NSW's 45th premier after being elected unopposed as the new leader of the Liberal Party.
The outgoing treasurer was elected unanimously after formally nominating for the position at a party room meeting at NSW Parliament on Monday morning.
Ms Berejiklian said she would be governing for the people of NSW.
"I want to give this commitment today to those 7.5 million people. I will be governing for everyone, I will be delivering for everyone," she said.
"I am proud of the fact that New South Wales has the strongest economy in the nation."
Finance Minister Dominic Perrottet was elected as deputy leader of the Liberal party, the party whip Chris Patterson told a large media scrum outside the meeting.
Ms Berejiklian, a moderate who hails from the left of the party, was the only person to put her hand up to take over the top job after Mike Baird made his shock retirement announcement last week.
She will become the first Liberal female NSW premier and second woman to hold the office when she is sworn in at a ceremony on Monday afternoon.
After being elected, Ms Berejiklian addressed the media, outlining how she might tackle a number of issues facing NSW.
"I strongly believe supply is the best way to address housing affordability," she said.
She also flagged education as an issue dear to her heart.
"I want to pay tribute to the teachers who, during my life at school in the public education system, saw something in me and encouraged it.
"That is why you will have in me, the strongest supporter of Gonski," she said.
Elected to the seat of Willoughby on Sydney's lower north shore in 2003, the current Treasurer and Minister for Industrial Relations has risen steadily through the political ranks in her 14-year career.
The daughter of Armenian migrants, Ms Berejiklian said her parents played a big role in her success. Her father, a boilermaker who worked on the Sydney Opera House, and her mother, who left school at 15 to help her family and eventually become a nurse.
"There wasn't a week that went by when my parents didn't remind us of how lucky we were to have the opportunities we have here in New South Wales," she said. "They made us believe we could be anything we aspired to be.
"In our household there was no room for complaining or making excuses, you just got on with the job and did it."
With two years until the next state election, Ms Berejiklian has time to impress voters and will seek to find her own way forward with other possible changes to freshen up the cabinet.
A significant cabinet reshuffle is expected, with Health Minister Jillian Skinner and Community Services Minister Brad Hazzard tipped to be moved out to make way for new blood.
She's also likely to reconsider a number of unpopular Baird government initiatives, including forced council amalgamations, as she moves to quell pressure from coalition partner, the Nationals.
The former transport minister was also forced to defend the $500 million cost blow-out to the light rail project.
She vowed Sydney would be a much better place to move around when the project is completed.
"What the public is getting is much better than what we thought we were giving the public," Ms Berejiklian said.
Mr Baird revealed his surprise exit from politics last Thursday citing the serious health challenges his parents and sister were facing.
His tenure ends on Monday after being in the top job for two years and nine months.
As he left the party room following the short 10-minute meeting, Mr Baird said it had been a privilege serving as premier.
"Words can't describe my gratitude. I will always reflect on it as a special time," Mr Baird said.
The state of NSW should be very pleased and delighted with Ms Berejiklian's appointment, he said.
