A single phone call almost a decade ago has led to Eddie Obeid being ordered to swap his Sydney mansion for a jail cell.

That call was "a very serious example" of wilful misconduct in public office, said Justice Robert Beech-Jones in jailing the former NSW minister for at least three years.

"If Mr Obeid had not wilfully abused his position as a parliamentarian then his life and career would be a testament to the values of hard work, family and public service," he said on Thursday.

"Instead, his time in public life has produced a very different legacy."

The 73-year-old former Labor powerbroker remained stony-faced in the NSW Supreme Court dock as he was jailed for a maximum of five years.

Relatives in the public gallery gasped, while his wife Judith later left the court room sobbing before the judge refused to grant Obeid bail pending an appeal.

He was found guilty in July of lobbying a senior public servant, in a 2007 phone call, about lucrative Circular Quay leases without revealing his family's stake in the outlets.

His offence was not his failure to disclose those interests, but in communicating with the public servant for the purpose of advancing his or his family's pecuniary interests, the judge said.

"The more senior the public official the greater the level of public trust in their position and the more onerous the duty that is imposed."

Obeid's intervention did not lead to any financial gain or a change in policy, but the judge said his conduct was a serious departure from the duty he owed the public as an MP.

"A parliamentarian cannot use their position to afford generosity to their family or associates in any form."

Premier Mike Baird declared "justice has been done" and that legislation will be changed to ensure Obeid is stripped of his $120,000 a year pension.

"(If) you use your public office for personal gain, there is no excuse," Mr Baird said.

Former Labor premier Kristina Keneally, who was dogged by the accusation that she was Obeid's puppet throughout her leadership, also welcomed the news.

"Justice has been done. The judgement's words on the significance of Obeid's crime and its potential to undermine our democratic system are important," she said.

"Anything less than jail would have been a grave disappointment to the people of NSW."

Obeid, who has nine living children and 33 grandchildren, has a "constellation" of medical issues and in August suffered a mild stroke.

While the judge accepted he would receive superior medical treatment in the community, he said his treatment would be "adequate" in jail.

He also noted his previous good character and the many testimonials tendered on behalf of Obeid, who was elected to the Legislative Council in 1991 and retired in 2011.

The judge rejected defence submissions that Obeid had suffered a form of punishment from extensive "humiliating" media coverage.

The reports generally related to corruption and politics, a topic of legitimate public debate.

"Corruption by elected representatives consumes democracies," he said.

"It destroys public confidence in democratic institutions."

Thus the need for general deterrence, denunciation and recognition of the harm done to the community were the dominant considerations when sentencing offenders, he concluded.

The Baird government will also move to recover around $280,000 worth of taxpayer-funded legal assistance given to the former MP to fight his court case.