The government is opening all 13 of Sydney's metropolitan bus contracts to competitive tender over the next three years, including the remaining three state-run regions - in the city's northwest, north shore and northern beaches as well as the eastern suburbs - by early 2020.

Sydney's diesel buses will also be replaced by an entirely electric fleet.

Premier Gladys Berejiklian ruled out more privatisations just days before the state election in March.

NSW Labor leader Jodi McKay says the decision to now privatise the remaining state-run buses is tantamount to a lie.

"The premier went to the election on a lie," Ms McKay said in a statement on Thursday.

"She said no further privatisations and yet here we are, just months after the election, and she is busy selling off our precious public assets."

The opposition leader said selling the buses wouldn't help commuters but would "line the pockets of the private sector".

But Transport Minister Andrew Constance denied the regions were being privatised, insisting the model was actually "franchising".

"We're not selling the buses, or the depots, we are making sure that they remain the belongings of the people of NSW," Mr Constance told reporters, adding the government would continue to regulate timetables and Opal fares.

The minister denied ever ruling out such a model.

He categorically ruled out a move to privatise or franchise Sydney Trains.

Ms Berejiklian told parliament: "We've been franchising bus services since 2011. Wakey wakey, we've been doing it for the last eight years, shock horror."

But Unions NSW secretary Mark Morey said the proposal was a betrayal by the coalition which didn't mention the plan before the March 2019 state election.

"Job security has just been shredded for drivers, while support staff in finance and administration face an even more uncertain future," he said in a statement.

"Under any privatisation, costs must be cut to create a profit margin for the new operator. That means jobs and services suffer."

Mr Constance said the majority of workers employed under the State Transit award would have jobs with the new operators - including all bus drivers and maintenance staff.

The current agreement would remain in place for the first 18 months and then a two-year job guarantee would be embedded into new contracts, the minister said.

Some staff at the head office of State Transit - which won't exist in 18 months - will likely be absorbed into Transport for NSW.

Unions will meet on Thursday afternoon to plan what action they may take.

Australian Associated Press