Mr Iemma offered his resignation to the Centre Unity faction and then Caucus today, clearing the way for Mr Rees' elevation to the state's top job.

It's the first time Labor has dumped a premier in its 117-year history.

Mr Rees, along with his new deputy Carmel Tebbutt, is from the Left. His unanimous elevation to the premiership breaks the Right's traditional stranglehold on appointing the state's leader.

Mr Iemma was rolled after failing to win the Right's support for his crucial Cabinet reshuffle - sparked by Wednesday's resignation of Deputy Premier John Watkins - that would have seen a change in several senior positions.

``As you all know, Morris Iemma resigned as Premier today,'' Mr Rees told reporters as he emerged from a Labor Caucus meeting today.

``I nominated for the vacancy and I was elected unanimously by the full Labor Caucus.

``In addition to that, Carmel Tebbutt has the full support of the Caucus for the Deputy Premier position.''

Mr Rees, who had been the Minister for Emergency Services and Water, will be sworn in this afternoon and pledged to get to work immediately.

``We start work today for the people of NSW, we start work this afternoon to deliver services to the people of NSW,'' he said.

He said a new cabinet would not be announced until after the weekend.

``We'll have a new cabinet. It will be elected early next week, but not today,'' he said.

Mr Iemma and Mr Watkins left the meeting moments before their successors, prompting applause from their colleagues.

``We'll talk later,'' Mr Iemma told reporters.

Backbencher Phil Koperberg lamented the loss of a ``compassionate and decent'' leader in Mr Iemma, but said caucus was fully behind the new leadership team.

``(We are grateful for) the work that Morris has done as a compassionate and decent man,'' he said.

``We have now fallen behind the new leadership, as you'd expect.

``It's a question of unity and discipline as we work towards winning the next election.''

Mr Rees took over the water portfolio when Mr Koperberg resigned due to ill health earlier this year.

Ms Tebbutt - who this week agreed to return to the frontbench for the deputy's role - will be NSW's first female deputy leader.