Mr Grant released the following statement at lunchtime on Monday:

“As a result of The Nationals candidate for Orange Scott Barrett facing an uphill battle to hold the seat, I have informed the NSW Nationals leadership team that at tomorrow’s Party Room meeting I will be standing down as Leader of the NSW Nationals,” Mr Grant said.

“It has been an incredible privilege to serve in that role and lead a team whose sole focus is to serve the people of regional NSW.

“At all times I have been guided by my principles of honesty, integrity and hard work but I accept the result in Orange is a clear message that we haven’t always got it right, nor have we always taken the community with us.

“Regional NSW is full of hard-working, decent people that want to see their Government supporting them and otherwise let them live their lives as they see fit.

“I hope that through my actions the NSW Government is given the opportunity to pause and reset the way it is seen to be governing and our record of delivery can once more be front and centre.

“I am proud of the results the NSW Liberals & Nationals have been able to achieve for regional NSW and the state since coming to power and it is vital that this continues.

“I thank those in the party, our branches and our communities for the trust and support they have shown me during my time as Leader.”

Moments before Mr Grant released the statement the Central Western Daily spoke with Nationals candidate Scott Barrett. 

Mr Grant's announcement came shortly after Premier Mike Baird told a media conference that Mr Grant has done "a fantastic job".

"I think Troy is a first class person," he said. "I think he should be given every opportunity to continue in his role, because ultimately you want the best possible people that have a passion for the region. He has a deep passion for regional NSW."

Skills Minister John Barilaro is likely to be elected deputy premier and leader of the NSW Nationals in Mr Grant's place.

The move will trigger a reshuffle of the cabinet.

Deputy Nationals leader and education minister Adrian Piccoli praised Mr Grant's time as leader.

"Troy has done a fantastic job in sometimes difficult circumstances," he said.

"He's an incredibly loyal and ethical operator, that's why I've always backed him."

Asked if he would re-nominate as deputy Nationals leader, Mr Piccoli declined to comment.

Coffs Harbour MP Andrew Fraser, who planned to put the spill motion on Tuesday, said Mr Grant had "done what he should have done".

"It's now up to the party room to select a new leader," he said. "I will be nominating and supporting John Barilaro.

"I think we have to have a spill of all positions. The party needs to have a fresh start going into the 2019 election."

Barwon MP Kevin Humphries – another of Mr Grant's critics – also welcomed the decision.

"I think he's done the right thing," he said.

"The general public and certainly the broader community had tuned out as far as the leadership of the Nationals was concerned.

"That position was potentially not recoverable. We're better off dealing with these issues now than kicking them down the road.

Mr Humphries said he would not be nominating for any of the leadership positions that become available.

The Nationals suffered a 35 per cent swing against them on the primary vote in the byelection on Saturday, described by ABC election analyst Antony Green as "the biggest first -reference change in NSW byelection history".

A predicted two-candidate preferred result by Mr Green based on projected preference flows has Shooters, Fishers and Farmers candidate Philip Donato beating the Nationals' Scott Barrett by 50.3 per cent to 49.7 per cent.

Labor preferenced the Shooters, Fishers and Farmers in the contest.

The result is being blamed on a combination of factors, including the controversial move to close the greyhound industry – later reversed – and the forced amalgamation of local councils.

But Mr Grant's critics, including Mr Fraser and Mr Humphries, had argued the Nationals had lost touch with their constituents under Mr Grant's leadership.