Premier Dominic Perrottet is seeking a fourth consecutive four-year term for his Liberal-National coalition, while Labor leader Chris Minns is hoping to return his party to government after 12 years on the opposition benches.
Labor is the strong favourite to win the election, leading the polls and overwhelmingly ahead in betting agency odds.
The premier voted in Beecroft in the morning, accompanied by his wife Helen and the couple's youngest daughter, Celeste, as school volunteers sold colourful cupcakes and sausages to punters.
"It's a very important day for the future of our state. There's a lot at stake", Mr Perrottet said.
"Our party has been a team for over 12 years that has transformed NSW. We've turned the economy around, built the schools and hospitals, the trains and motorways that have transformed people's lives".
Mr Perrottet also lauded the coalition's economic credentials as helping to get families through a period of rampant inflation.
Across the city in his marginal seat of Kogarah, Mr Minns cast his vote shortly after midday alongside his wife Anna and three sons.
He said Labor's plan was to rebuild essential services beginning with hospitals and put an end to privatisation of state assets.
"Our message to undecided voters before polls close at six o'clock tonight is vote for change," he told reporters.
"Vote for a fresh start for NSW, for a team that's got a plan for essential services, for our schools and for our hospitals, who's going to stand up against privatisation and really put the people of NSW first."
Both leaders have campaigned hard in vital seats in Sydney's west, where one in 10 Australians live and many electorates are on a knife edge.
If Labor wins from opposition, it will be only the second time the party has managed the feat since 1976.
On the eve of the election, Newspoll showed Labor leading the coalition 54.5 to 45.5 on a two-party preferred basis, putting Labor on a path to claim the 10 seats needed to form a majority government.
Prime Minister Anthony Albanese lent his support to Mr Minns' pitch for premier, campaigning for Labor in the Liberal-held seat of Ryde before casting his own vote at a booth in Sydney's inner west.
He said a string of senior Liberal ministers "bailing out" before the state election showed the Perrottet government "doesn't even have confidence in itself".
"It's time for a change of government and I hope that happens today," Mr Albanese told reporters.
A raft of minor party and independent candidates vying for the cross bench could make the difference in the event of a minority government, with the Greens and teals vowing to hold the government to account on climate and other progressive reforms.
Kingmaker Alex Greenwich, who is looking to win again as an independent in the seat of Sydney, said there had been a trend away from the major parties towards smaller parties and independents.
Sidestepping the question of who he would support in the case of a hung parliament, Mr Greenwich said it would be incumbent on the crossbench to provide the next government with stability.
Back in Beecroft, Bernard James, a 32-year-old lawyer who commutes to Parramatta for work, said he voted for the Liberals as the premier was a strong leader and the metro line had cut his commute time.
But he had concerns about the Liberals' cohesion, pointing to several corruption scandals that have dogged the party in recent years.
"Hopefully (Mr Perrottet) wins and the next government isn't controlled by the independents," Mr James told AAP.
