Sydney will Sunday bid farewell to what has been termed a transport "white elephant" -- a monorail which has looped the centre of the Australian city for almost a quarter of a century.

The New South Wales state government announced in March that the controversial above-ground rail link would be pulled down.

"I think at the time there wasn't enough planning gone into it," the state's transport minister Gladys Berejiklian said on Friday.

"I think history has proven on the monorail project that unless you get the planning right, you do risk creating these white elephants."

Berejiklian said the monorail -- which essentially connected the convention and tourism precinct of Darling Harbour to the central business district -- "did not look right" in Sydney.

Frank Sartor, who was a city councillor when the monorail was first built, said he had always hated it.

"It's aesthetic mainly -- I mean, it interrupts the streetscapes of Sydney," he told the ABC.

"It didn't serve particularly well as a transport system, although some people that live locally, they like it and it works for them."

The government has encouraged people to enjoy a final ride on the monorail over the weekend, with all proceeds from ticket sales going to charity. The final loop was set to take place at 9:30 pm (1130 GMT).

The ageing monorail, which would have been too costly for the government to upgrade to keep in operation, will be replaced by light rail service.