At a press conference in Sydney on Thursday morning Mr Baird said family health issues caused him to consider his future.

"My father has gone through open heart surgery... My mother has just gone to 24-hour care and that's very tough to watch as a son,” he said.

Mr Baird says he was in hospital last week with his sister, Julia, who is facing a recurrence of her cancer fight.

"Those personal things obviously impact you," he said.

Mr Baird would not comment on who should replace him but said he will cast a vote in a party room ballot.

Baird said he believes the coalition can secure a third term of government.

"I'm confident that we can win the next election," he said. "You need new leadership ... to continue to listen to the community.

"Refreshing now gives a Premier two years to set an agenda."