The decisions of Newcastle MP Tim Owen and Charlestown MP Andrew Cornwell to resign comes after Premier Mike Baird urged them to consider their future earlier today.
Mr Owen this morning admitted to lying to the Independent Commission Against Corruption about his handling of 10-thousand dollars in cash he received from a property developer.
Dr Cornwell told the corruption watchdog last week he had received a bribe from another property developer.
Just before the start of Question Time, the speaker of the NSW lower house Shelley Hancock told parliament she'd received letters of resignation from the two men and that their seats were now vacant.
Earlier, Mr Baird had told reporters the people of the Hunter and the people of NSW have been betrayed and called on both men to consider their positions as members of parliament.
Greens MP Jamie Parker was planning to introduce a motion to throw Dr Cornwell out of parliament later today but scrapped the motion when the two MPs quit.
Mr Baird says by-elections will be held in Charlestown and Newcastle despite the NSW election being only seven months away.
"Everyone in NSW, everyone in the electorates has the right to feel appalled, angered and betrayed," he told parliament.
Opposition Leader John Robertson urged Mr Baird to introduce full public funding of elections to remove the "corrosive influence of donations once and for all".
Mr Baird said the government had already taken action on the issue, launching reviews into donation rules and the governance of the Liberal Party.
Mr Owen on Monday told the ICAC that he returned $10,000 he received in a car from property developer and now Newcastle mayor Jeff McCloy.
But on Tuesday Mr Owen sensationally told the commission that was a lie and he in fact had put the money into his campaign.
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