Former NSW deputy premier John Barilaro has been temporarily blocked from taking up a taxpayer-funded job in New York City.
The government announced Mr Barilaro had been appointed the state's senior trade and investment commissioner to the Americas on Friday afternoon, a role the ex-Nationals leader created while trade minister.
Labor accused the government of giving out "jobs for mates" over the $500,000 appointment, and launched an upper house inquiry to investigate the process.
Labor passed a motion in parliament on Wednesday to halt the appointment until an inquiry had completed and reported its findings.
Mr Barilaro had been expected to relocate to New York City within months.
The motion was supported by the Greens and Independent MP Justin Field, and opposed by the government and One Nation, and passed 20 to 18.
Labor criticised the appointment process, saying it should have been approved by cabinet.
The inquiry, due to start within weeks, will investigate if a deal was done and scrutinise the work of recruitment firms to fill the roles, with the possibility Mr Barilaro could be called to give evidence.
Labor upper house leader Penny Sharpe said NSW Premier Dominic Perrottet would ultimately face questions over Mr Barilaro's role.
"The premier and the minister for trade (Stuart Ayres) recommended this approval," Ms Sharpe told reporters on Wednesday.
She said the pair bypassed the cabinet to avoid feedback from their cabinet colleagues on the appointment.
"This is simply a question for the premier," Ms Sharpe said.
"Is he going to go through with this appointment or not?"
Earlier, the premier said Mr Barilaro had been appointed the role through an "independent process".
During the recruitment process, which began in March last year, the secretary of the Department of Premier and Cabinet said no candidate had been found, Mr Perrottet said on Wednesday.
A second appointment process then began, which led to the secretary recommending Mr Barilaro for the role, he said.
The premier said he had also spoken with Investment Minister Stuart Ayres "to get further information in relation to background and timeline in relation to those matters".
Mr Ayres said during Question Time the role was publicly advertised and Mr Barilaro applied as a private citizen.
"His application was not solicited by me as the minister or by Investment NSW," Mr Ayres said.
He said that on April 30, he told the premier and Deputy Premier Paul Toole of the secretary's recommendation to hire Mr Barilaro.
He said the decision was not required to go to cabinet.
Mr Ayres said he did not intervene in Mr Barilaro's appointment because it occurred after an "independent, open, merit-based recruitment process" that recommended a "qualified, suitable candidate".
"I reject in the strongest possible terms that the appointment of Mr Barilaro, as quoted in some media outlets, was a 'captain's pick' or a unilateral decision by me or any other minister."
Documents reveal four people were considered for the New York-based role during the recruitment process, and two were shortlisted.
One applicant, Jenny West, was told in August by then-premier Gladys Berejiklian she had the job, The Guardian reported on Wednesday.
She was later told the offer had been rescinded and was paid a substantial settlement, it said.
Mr Barilaro resigned from parliament the following month, days after the resignation of Ms Berejiklian.
Mr Perrottet disputed claims Ms West was offered the role, but said he would "get that clarified".
He denied Mr Barilaro's appointment was "a captain's pick", saying: "These were public service decisions through an independent process."
The premier earlier told ABC radio he would take action if there "were not good reasons" behind the decision to appoint Mr Barilaro.
