NSW Deputy Premier John Barilaro has made the "emotional" announcement he will not contest the federal seat of Eden-Monaro in an upcoming by-election, clearing the way for his state coalition colleague Andrew Constance to run as the Liberal candidate.
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The marginal NSW South Coast seat was vacated last week when popular Labor member Mike Kelly retired because of ill health.
Mr Barilaro said it was an "emotional day" when revealing he wouldn't contest the seat for the Nationals.
"The polling showed I could win but sometimes in this game, you let ego get in the way of good decisions and I've got to make the best decision for me, my family, for the people of NSW (and) more importantly for the people of Eden-Monaro," the deputy premier said on Monday.
"They've been through hell and back with the fires, COVID-19, drought; the last thing we need is an argy-bargy about what is right for that seat.
"I can still work for the people of NSW and I can support the people of Eden-Monaro as their state member already."
Mr Barilaro's withdrawal opens the way for Mr Constance, the state transport minister and Bega MP, to step forward as the lead candidate for the Liberal Party.
The deputy premier threw his support behind Mr Constance, saying the pair had been friends for almost a decade and "were never ever going to race or compete against each other".
Liberal senator Jim Molan is also reportedly considering standing and has until Friday to nominate.
When asked which man should run for the Liberal Party, Mr Barilaro said he was "a fan of Andrew Constance - I think Andrew Constance can win the seat".
But Mr Barilaro flagged the Nationals could still field a candidate.
"Just because I'm not running, it doesn't necessarily mean the National Party won't decide to run a candidate because at the end of the day, it's for the executive (to decide)," he said.
Mr Constance's office on Monday afternoon said "he's still considering his options".
Responding to reports Mr Constance was a sure thing, NSW Liberal Party president Philip Ruddock said even if there was only one candidate, their eligibility would still need to be tested.
"Then we have a process by which the single candidate may be endorsed," Mr Ruddock told AAP on Monday.
"But I thought we had a Melbourne Cup field."
The Liberals' 2019 candidate, Fiona Kotvojs, who narrowly lost to Mr Kelly, is also believed to be considering another tilt.
Premier Gladys Berejiklian said she was "extraordinarily pleased" that Mr Barilaro was remaining her deputy
Federal Labor leader Anthony Albanese said retaining the NSW seat will be a challenge even though it's 100 years since a government has won a seat in a by-election.
Bega mayor Kristy McBain has been pre-selected as Labor's candidate.
"When it really mattered, Kristy was there for her community," Mr Albanese tweeted on Monday.
"She led them through their darkest days during the bushfire crisis - and now she's fighting to be their voice in parliament."
Australian Associated Press
