Mr Stoner, the Member for Oxley, has served in the NSW Parliament since 1999 and as Nationals leader since 2003.

A leadership ballot is due to be held on Thursday, with Hospitality Minister Troy Grant, the Member for Dubbo, the leading contender.

Education Minister Adrian Piccoli, who has long held ambitions to lead the party, may also stand.

It follows the announcement by former Liberal Energy Minister Chris Hartcher earlier on Wednesday that he will also retire at next year's poll.

Minutes ago, Mr Stoner issued the following statement:

"Today I informed Premier Mike Baird and my parliamentary colleagues that I will be retiring from state politics at the next election.

"After almost 16 years, it remains a privilege to serve the people of Oxley in the NSW Parliament and I am humbled to have had the opportunity over the past 12 years to lead the NSW Nationals – the only party that truly represents regional NSW.

"Serving as a Member of Parliament requires our families and loved ones to make many sacrifices. For Members representing regional electorates, this includes many nights away from home. In the next phase of my life, I look forward to spending more time with my wife Cathy and our children on the State’s magnificent Mid North Coast.

"This decision is made easier by the knowledge that the leadership of the NSW Government is in the safe hands of my friend, Premier Mike Baird. Mike is an honest and courageous leader and, with his team, will continue to deliver effective, energetic and responsible policies for our State.

"Equally, the future of the NSW Nationals is a bright one. The NSW Nationals now represent 19 regional electorates and in the Upper House we have seven legislative councillors fighting for the interests of the regions. We have recently welcomed a dynamic core of new members who will take the party forward and ensure future governments continue to make regional NSW a great place to live, work and bring up a family.

"While the job of an MP is never done, I look back on my last nearly 16 years as an MP and I am proud of what I have delivered for the people of Oxley and the state of NSW, especially those who live in regional communities.

"We conducted Australia’s first ever community preselection in Tamworth in 2010, we defeated the independent movement at the Northern Tablelands by-election in 2013. With a total of seven Nationals Ministers around the Cabinet table and 26 parliamentarians, we have put regional NSW back at the heart of Government in NSW.

"In just under four years of government, we are rebuilding regional NSW with more than $13 billion of infrastructure projects, including the State’s first inland dam in over 30 years, over $1.5 billion for better hospitals and investing $1 billion more each year to build safer roads. Since being elected to government in 2011, there are now more than 2,200 additional nurses, teachers and police on the front line in regional NSW.

"Tomorrow at a meeting of the NSW Nationals parliamentary team, I will declare my position as Leader of the NSW Nationals vacant, so the party can elect a new leader and Deputy Premier.

"The Premier has indicated to me that in the interest of stability and continuity, he would like to keep the same cabinet until the election, and I am more than happy to continue serving in my current roles until that point. 

"Whilst a part of me wants to stay in Government to achieve more positive reform for the people of NSW, the time has come, after almost 16 years, to put my family first. I have no job lined up, and I am not under any cloud. I simply need to be there for my family.

"I would like to thank my constituents in Oxley, my current and former colleagues, members and supporters of the NSW Nationals and my hard working staff for their support and guidance throughout my career.

"And most importantly I would like to thank my wife Cathy and children for their love and support."