Michael Daley has pledged to put "working people first" in his pitch to voters after being elected as new NSW Labor leader.

Mr Daley beat out Labor water spokesman Chris Minns 33 votes to 12 in a vote at NSW Parliament on Saturday afternoon and will lead Labor into the March state election.

Labor shadow minister for trade, tourism and environment Penny Sharpe was elected as deputy leader.

Shadow environment minister Penny Sharpe will now act as deputy leader. ( AAP: Dean Lewins )

Speaking after the vote, Mr Daley said a government under his leadership would focus on "four key pillars":

World-class health and education

World-class health and education Easing the cost of living

Easing the cost of living Providing jobs for the suburbs and jobs for the regions

Providing jobs for the suburbs and jobs for the regions Making Sydney more liveable

However, he declined to go into detail on the policy platforms, declaring further detail would be provided in the coming months.

He said as "a boy from South Maroubra" he knew what everyday voters were going through.

"We drop our kinds off at school every morning and fight our way through traffic, just like you," he said.

"We want our kids to have the best start in life, to get the best possible education, just like you."

'A difficult few weeks'

Mr Daley takes over the reins of the party from Luke Foley who resigned on Thursday after ABC reporter Ashleigh Raper released a statement saying Mr Foley put his hands down her dress and inside her underpants at a 2016 Christmas party.

Mr Foley said the statement was false.

The former Labor leader was not at the caucus meeting on Saturday and revealed Friday he would not contest the upcoming state election, after originally announcing his intention to continue as a backbencher.

This afternoon, Minister for Corrections David Elliott issued an apology to Ms Raper for raising the allegation against Mr Foley last month under parliamentary privilege.

"I am deeply sorry for the hurt my comments have caused Ms Raper," he said in a statement.

"It was completely unintentional.

"I have every intention of respecting Ms Raper's wishes and letting her get on with her life and will be making no further comments."

Ms Raper said she never wished to make a complaint against Mr Foley or for the issue to be raised publicly.

On Saturday, Mr Daley said it had been a "difficult few weeks".

Chris Minns is the Labor Member for Kogarah. ( Supplied: Facebook )

Speaking about Mr Foley's resignation, Mr Daley re-affirmed that he would like the former leader to leave parliament.

Mr Daley was the red-hot favourite to take leadership role, despite 39-year-old Mr Minns unexpectedly throwing his hat into the ring on Friday afternoon.

Speaking after the vote, Mr Minns said he was a "realist" regarding his chances. He said it was a "great day for Michael".

When asked if he did better than he expected, Mr Minns said: "Ah, I dunno".

On Friday Mr Minns proposed to get rid of NSW's planning laws and scrap Sydney's lockout laws, which is not official Labor policy.

Who is Michael Daley?

Mr Daley, 53, has been deputy Labor leader from March 2016.

Before his career in politics he was a Customs officer. He then worked as a corporate lawyer before taking the seat of Maroubra in 2005 from former premier Bob Carr who was integral in his decision to enter politics.

Mr Daley — who has four children — now lives in Chifley, just south of his hometown, with his wife Christina.

Although he has long been touted as future leader, his career has not been without controversy.

In 2012 he was removed from parliament after being accused of being drunk while debating a bill in the early hours of the morning.

Mr Daley proudly asserts he is not a "career politician".

Michael Daley and wife Christina with son Austin and Olivia. ( ABC News: Philippa McDonald )

"I've worked really hard," he said.

"I grew up in the housing estates of south Maroubra. I was a paper boy from the age of 11. This is not an affluent area.

"I know what battling families are going through."

'He's got what it takes to be premier'

His wife met Mr Daley at work 20 years ago.

She described him as "patient, very patient".

"He's got what it takes to be premier," she said.

"He knows what the people of NSW need, he's compassionate.

His daughter Olivia, who wants to become a politician herself, said "I know he has the qualities to lead the Labor Party".