WASHINGTON (Reuters) - Trent Lott, the second-ranking Republican in the U.S. Senate, said on Monday he will retire, ending a 34-year career in Congress in which he became a powerful conservative figure.

File phot shows Sen. Trent Lott talking with journalists after voting on the U.S. Troop Readiness, Veterans' Health And Iraq Accountability Act on Capitol Hill in Washington April 26, 2007. Lott, the second-ranking Republican in the Senate, will announce he is retiring this year, congressional sources said on Monday. REUTERS/Yuri Gripas

“I am announcing today that I will be retiring from the Senate by the end of the year,” Lott, a former college cheerleader, said in his hometown of Pascagoula, Mississippi.

“Let me make it clear, there are no (health) problems. I feel fine. I may look my 66 years, but I honestly feel good.”

Lott made a remarkable political recovery from a gaffe in 2002 that cost him his position as Senate majority leader.

At a 100th birthday celebration for then-Sen. Strom Thurmond of South Carolina, who ran unsuccessfully for president as a racial segregationist in 1948, Lott was quoted saying that Mississippians were proud to have voted for Thurmond for president and that “if the rest of the country had followed our lead, we wouldn’t have had all these problems over the years.”

President George W. Bush and then-Sen. Bill Frist, a Tennessee Republican, were said to have helped nudge Lott out of his leadership job. On Monday, Bush had only kind words for Lott, saying “his immense talent will be missed in our nation’s capital.”

Mississippi Gov. Haley Barbour is expected to pick a fellow Republican to take the seat until the next congressional and presidential election in November 2008, when Barbour said he would call a special election.

The conservative state’s other senator, Thad Cochran, is also a Republican and is running for re-election next year.

Charles Pickering, a Republican congressman from Mississippi, was the most likely candidate to replace Lott, said John Bruce, an associate professor of political science at the University of Mississippi.

Sen. Jon Kyl is expected to seek Lott’s leadership post, according to aides. Another rumored contender, Sen. Lamar Alexander of Tennessee, said he would instead seek Kyl’s current job as Senate Republican Conference chairman, the No. 3 leadership post.

Democrats hold a narrow majority in the 100-member Senate with 49 seats and two independents who often vote with them. Lott is the sixth Republican to announce his retirement, putting those seats in more competitive play in 2008. No Senate Democrats have announced they would not run for re-election.

Speculation that Lott was considering retiring so he could make more money in the private sector began about two years ago after his Mississippi home was heavily damaged by Hurricane Katrina in 2005. He is leaving five years before his term expires.

Lott made a series of apologies to black organizations and others for the remark in 2002 that he said had been misinterpreted, and gradually worked his way back into the Republican leadership.

Lott was first elected to the House of Representatives in 1972 before entering the Senate in 1989.

He was a member of the House Judiciary Committee in 1974, loyally defending then-President Richard Nixon when the panel passed articles of impeachment on Watergate.

As his party’s “whip” in the Senate since January, he has been responsible for legislative strategy and ensuring that minority Republicans stick together on key votes.