Leader of Australia's biggest state economy quits politics

The leader of Australia's biggest state economy, New South Wales (NSW), on Thursday announced his resignation from politics two years out from the next election, citing ill-health in his family as one reason for his surprise departure.

State Premier Mike Baird has overseen major privatisation and infrastructure investment in Australia's most populous state, which is worth A$530 billion ($398.19 billion) and larger than the economies of Thailand, Malaysia and the Philippines.

"I said many times I didn't want to become a career politician," 48-year-old Baird told reporters in Sydney.

"I wanted to go as hard as I could for as long as I could and then step aside. Well, today, I am making good on that pledge."

The NSW economy accounts for 31 percent of Australia's gross domestic product with a population of 7.3 million.

In recent years NSW has seen sustained investment in infrastructure funded by a wave of privatisations, the most recent being the A$16.2 billion sale of power networks Ausgrid in October and TransGrid to an international consortium of funds for A$10.26 billion in November 2015.

A vote to replace Baird will be held next week, with state treasurer Gladys Berejiklian seen as the front runner.

Berejiklian has worked closely with Baird on the privatisation plans so a promotion to leadership is expected to see a continuation of current NSW economic policies.

"Berejiklian and Baird have committed to infrastructure investment through privatisations. Should she become premier, I can't see any change in that," said Peter Chen, professor of political science, University of Sydney.

The new state leader will be in place for the next asset sale by NSW, a 50.4 percent stake in Endeavour Energy that powers parts of southern Sydney and is expected to attract bids of around A$4 billion.

Baird has been Australia's most popular state leader, comfortably securing re-election in 2015, but was forced into several embarrassing u-turns last year after banning greyhound racing and restricting the purchasing alcohol across the state.

Despite those blemishes on his record, Baird had long been seen as a future leader of the country's ruling Liberal Party, especially as current conservative Prime Minister Malcolm Turnbull remains under sustained pressure.