Premier Gladys Berejiklian defended the dissolution of OEH, noting heritage would be shifted to the Arts portfolio headed by Don Harwin as minister.

Environment would have "a prominent place within Planning to make sure every decision we take considers the environment - whether it's the urban context or the regional [one]," the Premier told journalists after her new ministry was sworn in on Tuesday.

"Along with energy, it will be a key focus of the government," she said, adding the Environment Protection Authority would be given "more grunt".

A government spokeswoman earlier said the restructuring would enable the administration "to better serve the people of NSW".

"For the first time, we have a combined Energy and Environment portfolio and this new structure will ensure the government can take a holistic approach to this issue," she said. "The functions currently performed by OEH will continue.”

Among staff, though, the worry was that the oversight separately developed and funded for years would now be subsumed in the expanded Planning cluster, with job losses one consequence.

Rob Stokes, a former environment minister, returns as Planning Minister as part of the government's post-election reshuffle. Matt Kean will be the new Energy and Environment Minister.

Current and former OEH staff took to private social media chat groups to air concerns.

"Who voted these environmental vandals in??," one post to Facebook said.

"So much for Gladys indicating the environment is a priority. Biggest pack of political liars in the country," another post reads.

One senior staffer told the Herald OEH had often provided a dissenting view to Planning, such as when new housing projects in the Sydney Basin threatened the dwindling natural reserves. Remaining koala corridors, for instance, were among the habitats at risk.

Work that had previously been conducted by inhouse OEH experts was being diverted to external consultants - a process staff worry will accelerate with the bureaucratic overhaul now under way.

Penny Sharpe, acting Labor leader and environment spokeswoman, said NSW had now become the only state without an environment department.

"One of the first acts of the Premer - after talking a lot about the environment during the election - is to abolish the Office of Environment," Ms Sharpe said.

"This is a terrible outcome for the environment of NSW and it's a betrayal for [voters]," she said.

The environmental problems facing the state include more than 1000 plant and animal species threatened with extinction, an 800 per cent increase in land-clearing during the past three years, and waterways "that are in crisis", Ms Sharpe said.

"We need within our public institutions and within our government, a focus on the environment," Ms Sharpe said. "You cannot have that if it's simply a tiny little division in the bottom of a very, very large department."

Kate Smolski, chief excutive of the NSW Nature Conservation Council, said protection of nature and the environment was "so important it needs a separate department".

“This [change] shrinks the status of the Office of Environment and Heritage further and appears designed to reduce it to a back-office function of enabling development," she said.

“Under a previous Coalition government, the environment was downgraded to an office and has suffered ever since due to the gutting of staff, the subordination to other departments and the junior position of the Environment Minister," Ms Smolski said.

As part of the changes, the Office of Local Government will also cease to exist as a separate entity, while the Planning & Environment cluster will end its operations as of July 1 this year.