The bill was defeated in the Legislative Council by 20 votes to 19 in a vote that took place just after 11pm on Thursday.

It is a disappointing end for a campaign launched by a cross-party working group of MPs in a bid to convince the Parliament to support the bill based on similar laws in the US state of Oregon.

Advocates were hopeful the bill was sufficiently conservative to garner support of the upper house.

It proposed that terminally ill NSW residents over the age of 25 with less than 12 months to live be allowed to legally end their lives with medical assistance.

Safeguards included a requirement to consult two doctors, one a specialist in the illness, and a psychiatrist or psychologist.

The bill also contained a 48-hour cooling-off period, the right for a patient to rescind the decision at any time and for close relatives to challenge patient eligibility in the Supreme Court.

The debate was opened by Labor health spokesman, Walt Secord, who acknowledged the "strong, emotional, compassionate desire behind [the bill]".

But he added: "I have not yet seen it possible to develop adequate legislative safeguards to protect people from the misuse of these laws."

"I have not yet seen a legislative model in this area that cannot be exploited or manipulated. And I cannot support any gaps for exploitation when the consequences are so final".

Nationals MP Bronnie Taylor, a former clinical nurse specialist in palliative care, took aim at claims by palliative care professionals opposed to the bill.

She said that "this whole notion that excellent palliative care can cure all suffering is not true".

Ms Taylor disagreed the proposed laws would harm the most vulnerable, saying the legislation "will actually empower them; it will give them the control".

But Liberal MP Matthew Mason-Cox, whose youngest daughter is disabled, told the Parliament he worried about "what will happen" when he and his wife die.

"I cannot help but think that she may be less safe if this bill was to pass," he said. "I know many parents of disabled children also feel the same way.

"It is vitally important that their views are heard in this debate. The reality is that if you open the door to euthanasia you unwittingly, whether you like it or not, open the door to other types of potentially deadly practices and their associated unintended consequences."

Greens MP David Shoebridge spoke about his former party colleague John Kaye who died of cancer last year.

Mr Shoebridge recalled "the appalling and uncontrollable pain that he had towards the end of his life."

"He was given the best assistance with palliative care but even the best assistance couldn't manage the pain," he said.

"I only wish this bill had been in place for my former colleague Dr John Kaye".

Shortly before the vote, Nationals MP Trevor Khan, who introduced the bill, said if it is defeated "we will bring this bill back again".

On Friday Mr Khan said he would seek to reintroduce a bill after the 2019 election.

"We've established a solid foundation to go again," he said.

"I think all we need to do is keep pressing forward and we'll get there in the end".