Labor has won the New South Wales south coast seat of Kiama in a by-election held Saturday, taking the seat vacated by former MP Gareth Ward after his conviction on sexual and indecent assault charges.

Katelin McInerney was declared the new member for Kiama after returning 62 percent to 37 percent on the two-party preferred count against Liberal candidate Serena Copley. The result was called just two hours after polling closed, an unusually rapid declaration for a by-election.

Premier Chris Minns hailed the outcome as a clear endorsement of his government and said the result was "an invitation to work even harder for the entire state." "I want to thank the people of Kiama for putting their trust in Labor. We do not take that trust for granted," he said on Saturday night, adding that "now it's about turning the page." He said Kiama would now have a voice inside government and that McInerney "will be a fierce advocate for her community."

Copley conceded defeat on Saturday night. Election analyst Ben Raue called the race for Labor shortly after polls closed. Thirteen candidates contested the by-election.

The seat became vacant after Ward resigned in August following his July conviction for sexual and indecent assault; he is due to be sentenced next week. Labor held Kiama for roughly three decades before Ward won the seat for the Liberal Party in 2011.

Analysts and party figures noted the rarity of a governing party gaining a seat in a by-election. It is the first time in three decades that a seat lost in a by-election has gone to the government rather than against it. Labor's win does not immediately change the status of the Minns government, which remains a minority administration, but it moves the party closer to a majority ahead of the 2027 state election.

Opposition Leader Mark Speakman, whose leadership had been viewed as vulnerable to the by-election result, downplayed any immediate threat to his position during the campaign. "We are the underdogs," he told reporters in Kiama on Friday, and after the result he said, "I will be the leader. I will continue to be the leader." Speakman had framed the contest as a choice of the best representative for Kiama and as an opportunity to challenge the government.

Party officials said the by-election was the first major electoral test for the Minns government since it took office. Labor's campaign emphasised local representation and drawing a line under the scandal surrounding the former member, while the Liberals sought to retain the seat amid internal pressure.

Ward maintained a notable personal vote in previous elections, a factor Minns acknowledged when framing the by-election as a closure for the community. The swift declaration of a Labor victory and the margin on the two-party preferred count signalled a decisive shift back to the party that had long represented the seat prior to 2011.

McInerney will take her seat in the state parliament as the representative for Kiama following formal certification of the result and the completion of any necessary recounts and administrative processes. The outcome will be watched as an indicator of voter sentiment ahead of the next state election cycle.