The New South Wales Labor Party is now under the administration of the ALP national executive in an attempt to end corruption and limit union influence.
AAP reports Prime Minister Kevin Rudd and NSW Labor boss Sam Dastyari secured the agreement, after disclosures about former MPs' conduct came to light during hearings at the state's corruption watchdog.
News Ltd reports that Mr Dastyari will be given absolute power by the prime minister and the national executive to begin the reforms.
They include a policy of zero-tolerance under which MPs will be expelled if they are investigated for corruption.
AAP reports the administrative committee of NSW Labor is expected to be sacked.
Presently 80% of the NSW administration is comprised of union officials. This will be changed.
Mr Rudd and Mr Dastyari are seeking to have 50% of the new administration made up from rank-and-file members.