A member of "Labor Party royalty", former frontbencher Martin Ferguson, has announced he will quit politics at the September election.

Mr Ferguson, who is the member for the Victorian seat of Batman, says it was a "personal decision".

"It is not a decision that I have taken lightly," he said in a tearful speech.

"However I feel that the timing is appropriate and one that is in the best interests of my party and my family."

Prime Minister Julia Gillard said he had a "very proud track record of achievement".

"He can leave this parliament knowing that he has been part of, indeed a pivotal part of, a number of great Labor achievements," she said.

Opposition Leader Tony Abbott appeared to become emotional when paying tribute to Mr Ferguson, saying it was "a sad day for the parliament, a sad day for the Labor Party and a sad day for the country."

"If I may use the phrase, the Member for Batman is Labor party royalty," he said.

"Well may we shed a tear, Madam Speaker, for things which were, which should be, but which are not, and from this side of the political trench I salute an honourable opponent and a great Australian."

'First and last speech as a backbencher'

Mr Ferguson spent most of his seventeen years in parliament on the Labor frontbench.

"It's been an absolute privilege to serve as the member for Batman since 1996," he said.

Sorry, this video has expired Emotional Abbott farewells Martin Ferguson

"In fact this is my first and last speech as a backbencher."

In Opposition Mr Ferguson served in various portfolios including employment, immigration, transport and primary industries.

When Labor won government in 2007, he was appointed minister for resources and energy and tourism minister.

He has thanked his parents, wife and children for their love and support.

"Without that, I would never have been part of the achievement of the Labor movement, both industrially and politically that I have spoken about today," he said.

Mr Ferguson quit Cabinet in March after supporting former prime minister Kevin Rudd in a botched leadership spat.

Mr Rudd has released a statement describing Mr Ferguson as "one of the lions of the Australian labour movement, the most respected resources and energy minister in Australian history, someone who always knows his stuff and one of the world's genuinely good human beings".

Labor backbencher Joel Fitzgibbon described Mr Ferguson as a great loss to the party.

"I'm prepared to say he's the best Labor man never to lead the party, enormous contribution," he said.

"Full credit to Tony Abbott for his speech but he was able to draw on such emotion on the basis of Martin's respect across the parliament and his contribution over many years."

Long history in labour movement

Before entering parliament, Mr Ferguson rose through the ranks of the Miscellaneous Workers' Union until finally serving as president of the ACTU for six years.

Sorry, this video has expired Julia Gillard on Martin Ferguson's decision to retire

In that role, he helped negotiate the groundbreaking Accord on wages and prices with then prime minister Bob Hawke and treasurer Paul Keating.

"My main motivation has been to get Australians into decent, well-paying jobs," Mr Ferguson said today of his career.

"This is what the Labor party means to me - helping those less fortunate in life by providing new jobs and opportunities to achieve a better quality of life.

"Creating opportunities by working with business is not the same thing as pointless class rhetoric. In essence, we need to grow the pie to share it."

During Labor's leadership tussle earlier this year, Mr Ferguson was critical of the so-called "class warfare" waged by Treasurer Wayne Swan in his attacks on the political power of some of Australia's wealthiest individuals.

Mr Ferguson's seat of Batman, a solid working class electorate in Melbourne's northern suburbs, is normally one of Labor's safest seats on a two-party preferred basis, but in the last election the Greens outpolled the Liberals leaving a margin of 7.8 per cent.

Editor’s note: (July 17) This article originally reported that Batman is Labor’s “safest seat”. In the last election, the Greens candidate outpolled the Liberal candidate, complicating the traditional “two-party preferred” calculation. This is what the Electoral Commission calls a “non-classic” seat. With the 2010 result in mind, it was more accurate to describe Batman as “normally one of Labor’s safest seats”.