Stuart Ayres resigns as Barilaro scandal grows

The announcement on Wednesday morning by NSW Premier Dominic Perrottet came following weeks of turmoil.

Mr Perrottet said there had been a potential breach of the ministerial code of conduct after a draft review into the John Barilaro US job scandal.

"[The draft report] raised a concern as to whether Mr Ayres had complied with the ministerial code of conduct", Mr Perrottet said.

"When I put these matters to Mr Ayres, he offered his resignation from the ministry and as deputy leader Parliamentary Liberal Party.

"An investigation will now be undertaken to determine if Mr Ayres has breached the ministerial code of conduct."

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Mr Perrottet said he spoke with Mr Ayres on Tuesday night in regards to his role during the process.

"I will make this very clear, Mr Ayers denies any wrongdoing at all," he said.

The appointment of the former NSW deputy premier and Nationals leader to a US trade job earlier this year has been an escalating scandal for the government for nearly two months.

The recruitment process is also the subject of a NSW parliamentary inquiry which resumes on Wednesday, with Investment NSW CEO Amy Brown to give evidence.

It is understood that Mr Ayres will remain as the member for Penrith.

This is the second NSW minister to be sacked this week after Small Business and Fair Trading Minister Eleni Petinos lost her job after reports emerged of alleged "serious bullying".

- With Australian Associated Press