The New South Wales Government has pulled the pin on TAFE's expensive and problematic IT system.

In 2009, the NSW Government implemented the Learning Management and Business Reform (LMBR) network in schools, rolling it out in the state's TAFE campuses four years later.

Costing more than $500 million, the system has caused major problems at TAFE, with students complaining of not receiving results and staff describing it as "disastrous".

Skills Minister John Barilaro told TAFE staff the organisation would need to find a new IT system.

"We have asked TAFE NSW to look for alternative IT solutions to underpin TAFE for the future," Mr Barilaro said.

"The challenge is ... to make sure that we actually get a system that allows us to grow."

Teachers Federation president Maurie Mulheron said the Government had been in denial about the efficiency of the system.

"TAFE teachers have been telling the Government that the system doesn't work," Mr Mulheron said.

"It's only through their sheer goodwill and expertise, working through their holidays, working after hours, that TAFE remained operational."

Mr Mulheron said the Government would need to make sure that any replacement system would have to be fully operational before it was rolled out.

Earlier this year, the Opposition said the system was close to $1 billion over budget.