In a statement provided to 7News, Melanie Gibbons announced her intention to quit state parliament and seek Liberal preselection for the seat of Hughes.

"I love my community - but for some time it has been let down by Craig Kelly," the Liberal MP for Holsworthy said.

"It needs and deserves better representation.

"After a decade of service in the state parliament and two terms on the local council before that, I know that I am the best, and most qualified, person to fight for and care for the people of Hughes."

She is the second NSW government MP in as many weeks to quit for a tilt at a federal seat, after former transport minister Andrew Constance announced he would vie to win the seat of Gilmore back from Labor.

Mr Kelly has held the southern Sydney electorate, which takes in parts of the Sutherland Shire and Liverpool, since 2010.

However, the MP quit the Liberal Party and moved to the crossbench in February after he was criticised by the prime minister for spreading misinformation about vaccines and alternate COVID-19 treatments on social media.

Mr Kelly has also weathered bans from Facebook for peddling misinformation, and is facing potential legal action from the Therapeutic Goods Administration, which accuses him of misrepresenting its data on vaccine reactions.

He has now taken up a position as state leader of Clive Palmer's United Australia Party, and will attempt to retain the seat for them at the federal election.

Ms Gibbons, whose Holsworthy electorate sits inside Mr Kelly's, said she would remain in state parliament until the federal election is called.

Prime Minister Scott Morrison welcomed Ms Gibbons' decision to seek federal preselection, saying he had known her for many years.

"Melanie is a passionate local state Liberal member and has served her community for nearly two decades," he said.

"Her experience and perspective would be a welcome addition to my federal team."

The announcement sets up a fourth by-election for NSW Premier Dominic Perrottet, after his predecessor Gladys Berejiklian and former deputy premier John Barilaro also announced they would resign from parliament.

Labor's Prue Car criticised Ms Gibbons, saying she'd picked her career over her community.

"The midst of a pandemic is not the time for ministers and MPs to cut and run," Ms Car said in a statement.

"The focus of every member of parliament should be on opening up successfully and staying open, getting people back in jobs, kids in schools and the economy going again."

Australian Associated Press