Homeless people had been camping at Martin Place in central Sydney for more than six months.
State legislators argued the camp was unauthorised and compromised public safety. They granted police powers to remove the tents, but residents began leaving pre-emptively on Friday.
Some said they had nowhere to go.
The man dubbed the unofficial “mayor” of the tent city, Lanz Priestly, said some people would go to “friends’ places” or “friends’ backyards”, but others had no such option.
Debate over what to do with the camp had dragged on for months amid a political dispute between the New South Wales state government and Sydney City Council.
It also generated wider discussion about homelessness in Sydney, which has the second-worst housing affordability in the world, according to one study.
Troy, 18, was one of the camp’s youngest residents. He said he was moving into permanent government housing but that “housing one person” wasn’t a solution.
“What people don’t realise is that this place actually helps people, it finds people work, it finds people houses and a new way to get their lives started again … They should be showing these people more respect than they are right now.”
Organisers told Guardian Australia they did not know what would happen to residents who refused to voluntarily move from the camp. When asked whether all residents would leave by Friday night, Priestley said he did not know.
“How long is a piece of sting?” he said. “I don’t know that 10 other homeless people aren’t going to turn up here at 5 o’clock”.
Both the council and state government have blamed each other for the stalemate.
The opposition said the government already had the laws required to clear the tent city.
But under previously existing laws, the NSW government would need to issue a warrant against the homeless residents, which Premier Gladys Berejiklian said she was reluctant to do.
Social Housing Minister Pru Goward on Wednesday said the new legislation would ensure any unlawful use of Martin Place could be dealt with “appropriately and in a timely manner”.
“This bill underscores the principle that no one … should need to sleep in a tent in Martin Place,” Ms Goward said.
“The new powers are not intended to apply generally or specifically to homeless persons in the City of Sydney.”