New South Wales Treasurer Mike Baird is expected to become the state’s next premier, following Barry O’Farrell’s shock resignation yesterday.

Mr Baird met with Transport Minister Gladys Berejiklian – another favourite for the job,  earlier this morning, according to the ABC.

They are reported to have worked out an agreement, with Ms Berejiklian agreeing to be deputy party leader.

Mr Baird is also believed to have solid support and will have the backing of Right faction MPs, who have been impressed with his aggressive push to privatise the state’s assets and boost the economy.

He is the son of Bruce Baird, who was a lower house federal MP in John Howard’s government, and represents the northern beaches electorate of Manly.

Gladys Berejiklian. Photo: AAP

Ms Berejiklian is the daughter of Armenian immigrants and holds the north shore electorate of Willoughby.

She entered the political scene as president of the Young Liberals and has gone on to become one of the better performing ministers in the O’Farrell government, managing the tough transport portfolio.

She recently launched the pay-as-you-go Opal transport card and has committed billions to the new north-west train line.

Finance Minister Andrew Constance and Community Services Minister Pru Goward were reported to have run if no consensus is reached before 3pm and a party room ballot is required.

Mr Constance may garner some support from the left and Ms Goward, who has been a particularly strong media performer on social issues, is popular among regional MPs.

Mr O’Farrell resigned on Wednesday before heading to an Independent Commission Against Corruption (ICAC) hearing to admit evidence he gave a day earlier was mistaken.

At issue was a bottle of 1959 Penfolds Grange Hermitage – a gift from Australian Water Holdings chief executive Nick Di Girolamo.

Mr O’Farrell had insisted to the inquiry he had not received the wine and and knew nothing about it.

On Wednesday morning, Mr O’Farrell was advised ICAC had his handwritten note of thanks to Mr Di Girolamo for the wine, prompting the premier’s resignation.

-with AAP