"We have long looked at these wharves as the gateway to our city and said they deserve to be vibrant, they deserve to be modern," said Premier Mike Baird, unveiling the plan to the media on Monday.

"It's run down and not befitting of the greatest city in the world."

Potential concepts for new wharves released by Transport for NSW show two-storey wharves, with glass facades and the potential for retail space. Construction will begin in 2019.

The government would not say which buildings will be sold to fund the plan but said it was confident of raising the $200 million that Transport for NSW estimates is needed for the project.

Labor called on the government to release information about which assets would be sold and how much they would contribute to government coffers in rent.

The sales will come from a pool of about $1 billion worth of government assets in the area, including buildings now used for hotels and office blocks. These options will be reviewed over the next six months.

"There is no reason why the NSW government needs to be the landlord for these luxury hotels," NSW Minister for Finance, Services and Property Dominic Perrottet said.

"This is about making better use of what we have."

The Opposition Leader, Luke Foley, said the government needed to inform the public which buildings it was considering selling and how valuable they were.

"It's a pretty worrying start when, on day one, the Baird government can't or won't tell you how much they yield in rents from these assets," he said. "We need to be confident this won't end up being a fire sale of some of the most valuable real estate in Australia.

"I wouldn't trust this lot not to whack up a load of flats on top of the wharves. They've got form when it comes to the misuse of public space."

The government argues that any loss of rental revenue would be "limited".

"We're not going to make a decision that is not in the best economic interests of the state of NSW," Mr Perrottet said.

The move is the latest push to privatise government assets perceived to be serving little public use and follows the announcement of a plan to convert historic government offices into a five-star hotel.

As well as the properties owned by the government in Circular Quay are buildings currently operated by the Mercure and Four Seasons hotels at Darling Harbour and office space at Darling Park.

Mr Perrottet said the plan would not the diminish heritage values of the area.

The plan coincides with the abolition of the Sydney Harbour Foreshore Authority, following a review of the agency.

The organisation's functions and more than 100 of its staff will be transferred to other departments.

The Premier said he expected most staff to be retained but would not categorically rule out job losses among bureaucrats.

"The expectation is the vast majority of the roles will go to Government Property NSW," the Premier said. "We're trying to take away duplication and inefficiency in government."

But the Premier was also forced to acknowledge that a much more noticeable detraction to the Quay was looming in the foreground.

The MP for Sydney, independent Alex Greenwich, said that, while he welcomed the plan to revamp ferry wharves, the government should use the opportunity to demolish or redevelop the Cahill Expressway.

"The Cahill connects to the Botanic Gardens and I hope the government looks at opportunities to turn this expressway into a 'high line' style park," he said.

When questioned by a reporter, the Premier acknowledged the giant 1950s freeway that runs over the top of the Quay was a blight on the cityscape.

"You have a look at it, you think: 'Why was it put there in the first place?' " Mr Baird said. "It's one of those decisions where, if they had thought about it, they could have done much, much better."

But he said such major urban surgery was beyond the scope of this project.

"Ultimately it's billions and billions of dollars … If I had a money tree I'd have to shake it a lot. It's something that is just at this moment not something we can consider."

The new Greater Sydney Commission will have oversight of the entire harbour foreshore.

That body will also lead a review of heritage sites across The Rocks.

Chris Johnson, the head of the Urban Taskforce, a lobby that represents property developers, welcomed the government's continued "asset recycling", or selling off old assets to pay for new.

"The end of SHFA is appropriate with the decision to sell the hotel assets but it will be important that other agencies in the government continue [their] management role," he said.