NSW Nationals leader Dugald Saunders has quit after a two-and-a-half-year tenure in a move that has "surprised" some party colleagues.

Dubbo MP Saunders confirmed his immediate resignation in a statement to the media, describing his decision to step down as a "difficult" one.

"It's been an honour to lead the parliamentary team during a challenging time in opposition and I've always done my best to represent regional NSW," Saunders said.

"It's a difficult decision but it is the right time for me to take a step back and focus more on my family and myself.

"It's also the right time to allow a new leader to take up the fight ahead of the next election."

Saunders said he would continue to serve in his role as Dubbo's local member, a position he has retained since 2019.

He took on the

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