In the biggest change to police oversight in 20 years, Deputy Premier and Police Minister Troy Grant announced a new Law Enforcement Conduct Commission on Thursday following a review by former shadow attorney-general Andrew Tink.

The new commission will become the sole body responsible for detecting and investigating serious misconduct and corruption among police and overseeing complaints handling.

It will also oversee the NSW Crime Commission, which investigates serious and organised crime.

Critical incidents, which are fatal or near-fatal incidents that involve police, will still be investigated by police but their work will be monitored by the LECC as part of its oversight functions.

"The current oversight system has multiple agencies with overlaps and duplication of roles and functions," Mr Grant said.

"We need to fix it because it is causes confusion and a lack of certainty for those who complain and the officials complained about."

The PIC was set up in 1996 after the Wood royal commission exposed endemic corruption within the police. However, it has been criticised in recent years for being overly secret, pursuing questionable investigations and wasting scarce resources.

"Police officers lost faith in the PIC for a long period of time," said Police Association president Scott Weber, who called the change "a new era in police oversight".

Clive Small, a former NSW deputy commissioner, said the PIC ruined the careers and reputations of officers, sometimes without ever substantiating claims or allowing its methods to be scrutinised.

"They have kept things secret, they have been found to have been wrong on a number of matters and yet they still refuse to accept the findings of the inspector," he said. "There was a lack of trust because of the way they went about things."

He said the PIC was established for the right reasons but it became obsessed with finding "big scalps", despite the Wood royal commission rooting out most of the significant corruption.

"After a couple of years they couldn't find investigations that would give them high-profile results and that became frustrating to them.

"They were still looking for the hard and nasty stuff rather than saying, 'We've come a long way, our investigations need to be more refined, subtle things... that can be done to improve the performance and behaviour of police'."

The PIC has been criticised for some of its investigative methods during the long-running investigation into the bugging of innocent police officers' phones over a decade ago.

It has also been under pressure to justify why it pursued a 10-month investigation into Commissioner Andrew Scipione and Deputy Commissioner Nick Kaldas​ over claims that had already been investigated, and dismissed, by two other oversight bodies.

Mr Tink said he tested his idea for a single civilian oversight body with James Wood, head of the Wood royal commission, who gave reassurances that the model was achievable.

It was logical to combine the Ombudsman's role of dealing with complaints and the PIC's role of investigating misconduct because "the police complaints system can give an early warning of more serious patterns of misconduct", Mr Tink said.

The LECC will be headed by a serving or retired judge and is expected to start in 2017.

Shadow police minister Jodi McKay said the opposition cautiously welcomed the proposal but had not been consulted, despite supporting an overhaul.

"We're still willing to work in a bipartisan way but it is an extraordinary deviation from the co-operation that the Premier has sought – and that we've absolutely given – when it comes to ICAC and other corruption-finding bodies."

The PIC declined to comment but, in its submission to the review, agreed that a single oversight body was a good idea as long as it was properly resourced.