THE New South Wales has bought the company that owns the light rail and the monorail, clearing the way for the removal of the monorail to accommodate the new convention centre at Darling Harbour.

The purchase, announced last week by NSW Premier Barry O'Farrell and Minister for Transport Gladys Berejiklian, also aims to ensure efficient delivery of future light rail extensions.

Under the deal, the NSW Government has purchased Metro Transport Sydney (MTS) for $19.8 million, with the operation of light rail and monorail services will continue as usual as per the contract with Veolia for the meantime.

"The monorail is not integrated with Sydney's wider public transport network and has never been truly embraced by the community," Mr O'Farrell said.

"While it has been a controversial part of Sydney's history for more than 20 years, the monorail is reaching the end of its economic life and the NSW Government cannot justify costly upgrades like the purchase of new vehicles required to keep it running."

The Premier said the decision paves the way for the development of a world class Sydney International Convention, Exhibition and Entertainment Precinct.

The removal of the monorail will occur as soon as feasible after obtaining the necessary approvals and consulting with stakeholders.

Ms Berejiklian said the simplified contractual arrangements would make it easier for the Government to expand the light rail network in the future.

"The NSW Government is committed to expanding light rail and extending the Inner West Light Rail to Dulwich Hill.

"This purchase gives certainty to transport planners and will ensure light rail is fully integrated with the wider public transport network.

"The Light Rail Strategic Plan – examining the feasibility of extending the light rail network through Sydney's CBD, to the University of Sydney and the University of NSW – will be completed in the middle of this year, and the government looks forward to examining its findings," Ms Berejiklian said.