Mr Maguire resigned in disgrace in 2018 after admitting to a separate anti-corruption inquiry he sought payments to help broker deals for property developers.
NSW Premier Gladys Berejiklian resists calls to resign
Fronting a media conference on Monday afternoon flanked by Treasurer Dominic Perrottet and Health Minister Brad Hazzard, Ms Berejiklian admitted she “stuffed up”, but would not be stepping down.
“I'm very upset at what has transpired, but I want to make this assurance to the people of New South Wales - I have always put the public first. I have always made sure the public interest is first … in every single thing that I do,” she told reporters.
“Whilst I have made this mistake in my personal life, I intend to serve the people of New South Wales to the best of my ability. That's what I've always done."
NSW Premier reveals 'close personal relationship' with ex-MP at ICAC
Ms Berejiklian said she has always been a private person and the scandal had become a “personal nightmare”.
“For someone who is very private, for someone who is very by the book, for someone who put her trust in someone she thought she could trust - I'd known him for 15 years – I can't tell you what it's done to me personally,” she said.
“It's been devastating, and I've had to bear this on top of everything else.”
Mr Perrottet and Mr Hazzard stood by Ms Berejkilian and praised her work as premier.
"I have to say, she is an outstanding spokesperson. She is a person of great integrity. She is by far the best premier in this country," Mr Hazzard said.
NSW opposition leader Jodi McKay earlier labelled Ms Berejiklian a “fraud” and called on her to resign.
“She cannot possibly stay as the premier of this state, given the extraordinary evidence that has been given to the ICAC today,” she told reporters on Monday afternoon.
“She has been involved in a relationship with a disgraced MP, and she has done that up until about a month ago. That just shows very, very poor judgement.”
The opposition is planning to move a motion of no confidence in Ms Berejiklian tomorrow.
Ms Berejiklian told the ICAC inquiry she had a "personal attachment" to Mr Maguire and their relationship, which began in 2015, had been kept under wraps as she was a "very private person".
They last spoke on 13 September - less than a month ago - and Ms Berejiklian ceased communication only after agreeing to attend the ICAC inquiry.
Ms Berejiklian admitted that over the course of their relationship, Mr Maguire frequently spoke of his finances and was "obsessed" by them.
But she denied distancing herself from specific details on Mr Maguire's affairs in an attempt at self-preservation.
"I would never, ever, ever turn a blind eye from any responsibility that I had to disclose any wrongdoing that I saw, or any activity that I thought was not in keeping with what a member of parliament should be doing," Ms Berejiklian told the inquiry.
"I would suggest that I was either not interested or I thought what he was raising with me was fanciful. He was a big talker.
"A lot of the time, I would have ignored a lot of what he said as fanciful and information that I didn't care to be involved in or interested in."
The premier also said she didn't take a personal interest in Mr Maguire's finances, despite their relationship, as she was an "independent woman" with her own finances.
Ms Berejiklian was dragged into the saga last week when the ICAC heard Mr Maguire gave a western Sydney landowner - Louise Waterhouse - Ms Berejiklian's email address to help her lobby for rezoning changes that would benefit a parcel of land she held.
ICAC heard Mr Maguire passed on the email address and suggested the premier would be able to provide a "tickle from up top", but Ms Waterhouse said Ms Berejiklian never responded.
The inquiry continues before assistant commissioner Ruth McColl SC.
Additional reporting by AAP.