The awards were presented at NSW Parliament House by Environment Minister Rob Stokes.

The Observatory was earlier judged winner of the 2014 Small Business Sustainability Award category alongside the 24 other medium and large businesses and government and other organisations recognised for their green initiatives.

The Premier's award recipient, or "best of the best", is chosen "for exemplary leadership, vision and innovation, demonstrating a particular determination in overcoming obstacles to deliver successful outcomes".

"This year's winners are leading by example and represent our most environmentally-minded companies and organisations that are making sustainability an integral part of their operations," the Minister said.

"The boutique hotel, The Observatory, Port Macquarie, won the Premier's Award for their range of resource saving initiatives and environmental engagement with hotel guests," he said.

The hotel is operated by Chris and Trish Denny, directors of Southern Cross Resorts, who accepted the awards from Mr Stokes at the ceremony.

Mr Denny paid tribute to the hotel's 32 staff who he said were integral to its acknowledgement as the "best of the best" in the Green Globes and to The Observatory's pioneering sustainability efforts.

"The overall philosophy of our green initiatives has been to differentiate The Observatory as an industry leader in environmental sustainability, demonstrating that the sometimes competing interests of people, planet and profit can co-exist and thrive," Mr Denny said.

The awards consolidate The Observatory's position as one of the most awarded hotels in Australia. It also holds numerous NSW and national awards for guest service excellence.

In what is thought to be an Australian first, the hotel is a finalist for a 2014 international sustainability award in the annual World Boutique Hotel Awards being presented in London next week.

In 2012, The Observatory became one of the few Australian hotels officially certified as 100 per cent carbon neutral. In October last year it installed a 56-kilowatt rooftop photovoltaic system which its environmental consultants say generated 75 megawatts of power in its first nine months of operation, saving 68 tonnes of greenhouse gas emissions, equal to wiping out the carbon emissions of some 5000 guests a year.

Around $17,000 in electricity savings was freed up for other purposes and the hotel also reduced its water use by 16 per cent.

The initiatives are among a staged series of green and heritage innovations introduced by the Dennys since the hotel opened at Town Beach 10 years ago.