Engineer Dr Mehreen Faruqi will contest the seat of Heffron for the Greens.
Faruqi will take on Labor candidate and Botany Bay Mayor Ron Hoenig in the August 25 by-election caused by the resignation of former NSW premier Kristina Keneally.
Dr Faruqi stood against Keneally in the 2011.
She is viewed as Labor’s only real opposition with rumours the Liberals will not contest the seat.
Keneally retired from state politics to take up the position of CEO of Basketball Australia last month.
Hoenig, who has been the Mayor of Botany Bay since the early ‘80s, will still contest the local government elections on September 8.
If elected to state parliament he will have to resign from one of the roles within two years under new legislation preventing an individual from holding both state and local positions.
The move has been widely perceived as an attack on Independent Sydney Lord Mayor Clover Moore who also holds the inner city NSW seat of Bligh.
The Greens also announced Dr Alan Hough as their candidate for the Botany Bay mayoralty, a former president of the Queensland AIDS Council and Governor of the AIDS Trust of Australia.