Prime Minister Kevin Rudd has praised outgoing NSW Premier Morris Iemma's substantial contribution to public life in NSW over two decades.
"Morris achieved much for NSW, both as a senior minister and premier of Australia's largest state," the prime minister said in a statement.
"Morris put mental health on the national agenda, brought James Hardie to account and made tough decisions for NSW's future in the areas of desalination and energy reform.
"Morris also recently oversaw a highly successful World Youth Day festival."
Mr Rudd said Mr Iemma's ability, work ethic and leadership skills were acknowledged when he replaced Bob Carr as premier in 2005.
"Two years later he delivered Labor a record fourth consecutive four-year term in NSW.
"I wish Morris, Santina and their family all the best for the future."