Leader of the National Party in the Upper House Duncan Gay today said Mr Grant had all the right qualities to be a strong leader.

“Troy encapsulates the decency of the old country party - he is a dedicated team player with a strong orientation to the people of the bush and all that rural and regional NSW stands for,” Mr Gay said.

“He has a strong sense of what is right for the community - a decorated former police inspector, who before entering Parliament, delivered a number of important community based initiatives.

“From the first time I met Troy in Dubbo, and he got out of his ute, I knew this man would make a huge contribution to the National Party."

9.36AM: Member for Dubbo Troy Grant said he is humbled by the faith and trust placed in him by his parliamentary colleagues who have named him the state's next deputy premier and National party leader.

Mr Grant said there's no greater privilege for a son of regional NSW to lead the community he respects in a statement this morning.

“Every member of the NSW Nationals team is passionate about getting the best outcomes for our communities," Mr Grant said.

“The confidence the people have shown in us is something I don’t take for granted and I intend to work hard to maintain their trust.

“The Nationals represent communities across this state full of good honest people and as Leader I am determined to fight for them.

“It is with great humility I accept the challenge and I am determined to be hard working, fair and equitable in my decision making and engaged with the party and the people across NSW.

Mr Grant paid tribute to Andrew Stoner acknowledging the contribution he has made to the NSW Nationals for 16 years, particularly as leader for the last 11.

“Andrew led the Nationals to an outstanding result at the 2011 election, achieving 19 of the 20 seats we contested. It has been a pleasure and a privilege to work with him.

“I look forward to working alongside Premier Mike Baird, Deputy Nationals Leader Adrian Piccoli and the entire NSW Liberals & Nationals team as we transform NSW.

“The Premier and I share similar values and the same dedication to community service," Mr Grant said.

“I take on this role with my wife Toni and kids Taylor and Hamish who have been unwavering in their support since I was elected as the Member for Dubbo in 2011."

​9.27AM: The new state deputy premier is due to address the media. 

9.10AM: Sources within the NSW Government have confirmed Hospitality minister and Member for Dubbo Troy Grant as the state's new deputy premier and leader of the NSW Nationals party. 

Mr Grant was elected unopposed this morning after incumbent deputy premier Andrew Stoner announced his retirement at the next state election in March yesterday.

Other MPs have taken to Twitter to congratulate the former policeman, including NSW premier Mike Baird. 

8.43AM: Member for Dubbo Troy Grant will make a statement to the media at 9:30am.

Mr Grant will be joined by Deputy Leader of the NSW Nationals Adrian Piccoli and Leader of the NSW Nationals in the Legislative Council Duncan Gay.

8.30AM: Hospitality minister and Member for Dubbo Troy Grant is the favourite to become the next deputy premier of NSW and leader of the Nationals after education minister Adrian Piccoli announced he would not nominate.

In a statement, Mr Piccoli said he would support Mr Grant "who will make a great leader of the NSW Nationals."

"I look forward to continuing as Deputy Leader of the NSW Nationals and Minister for Education," he said.

Nationals MPs will gather on Thursday morning to elect a new leader after Andrew Stoner announced his retirement at the 2015 election.

Mr Stoner said his "difficult" decision to retire followed a request from his wife Cathy, who is dealing with serious "health issues".

He will step down as Nationals leader on Thursday morning but will remain in cabinet overseeing his portfolios, which include trade and investment, tourism and major events, until the election next year.

The member for the mid-north coast seat of Oxley, Mr Stoner has served in the NSW Parliament since 1999 and as Nationals leader since 2003.

He said the decision to retire from Parliament was made after a recent break with his wife and three children.

"I became aware of the seriousness of the issues with which my wife has been dealing," he said.

"She asked me to bring forward my plans for retirement and I didn't hesitate."

Mr Stoner his wife has been dealing with "some health issues and other issues".

He pointed out that last year the job meant he spent 250 days away from home.

"This has coincided with some very difficult family issues that have been faced by my wife and three children back at home," he said.

"I can no longer expect or ask my wife, Cathy, to face these issues alone".

Mr Stoner said he has "no job lined up, I'm not under any cloud. This is about putting my family first".

He said he could not see himself taking on full-time employment upon leaving politics but would consider part-time work.

Premier Mike Baird said Mr Stoner had been "a great leader of the NSW Nationals, a fine Deputy Premier and above all a passionate advocate for regional NSW".

Nationals state chairman Bede Bourke said Mr Stoner had been "a steady and patient hand at the wheel at a critical time in our history. He has served the people of NSW and the members of the Nationals with distinction, and I wish him and Cathy well in his retirement."

MORE TO COME.

- With SMH