The NSW Opposition leader has caved to party pressure and quit his post, becoming the second state Liberal leader to do so in three days.
After days of swirling speculation, Mark Speakman announced his resignation on Thursday afternoon.
Two challengers — Vaucluse MP Kellie Sloane and former minister Alister Henskens — are gunning for his position ahead of an expected leadership ballot.
Speakman confirmed his resignation at a media conference, having earlier cancelled a round of media interviews as speculation of a looming spill intensified.
One Liberal MP, speaking on the condition of anonymity, said earlier replacing Speakman was a necessary move.
"We want to win government and it's not about the individual, it's about the team," the MP said.
"It's nothing personal against Mark, it's time ... the emperor is going to have to put on their new gear."
Speakman had earlier on Thursday indicated he wasn't giving up.
"Reports of my death are grossly exaggerated and I'm here to fight," he told 2GB radio, rephrasing a line from 19th-century US writer Mark Twain.
"I would expect anyone who wants to be the leader, who wants to knock me off ... would come and tell me, and no one has."
The NSW Liberals have committed to net-zero greenhouse emissions by 2050, in contrast to their counterparts in Canberra.
Speakman suggested infighting among his federal colleagues had inflicted further damage on the Liberal brand.
"We've taken a lot of brand damage from the turmoil in Canberra since then, and our job is to make sure we get clean air," he said.
The move against Speakman comes after Victoria's Liberal Opposition this week dumped Brad Battin as leader and installed first-term MP Jess Wilson.
Speakman was animated in a tense question time in parliament on Thursday, while Premier Chris Minns appeared unfazed.
'Game of Thrones'
Outside parliament, independent MP Rod Roberts described the roiling leadership spectacle as a "Game of Thrones".
He cautioned the Liberals needed to move swiftly to become an effective opposition with a state election less than 18 months away.
The Liberal Party needs one-third of its sitting MPs to agree to a meeting to allow contenders to challenge for the position.
Sloane, a former TV news anchor elected to parliament in 2023, has been widely tipped as the most credible challenger, while Henskens has support from the right faction.

Kellie Sloane is widely tipped to replace Mark Speakman as leader of the NSW Liberals. Source: AAP / Bianca De Marchi
The NSW Coalition has been in upheaval after the Nationals elected Coffs Harbour MP Gurmesh Singh as leader on Tuesday unopposed after Dugald Saunders' shock resignation for family reasons.
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