Defence Minister Stephen Smith announces he will not recontest at the next election.

STEPHEN Smith has announced his resignation from politics, but says he will continue to serve as defence minister until the poll.

The Perth MP said Mr Rudd had asked him to stay on in the position, and he had "enthusiastically" accepted.

Mr Smith says he had enjoyed a "clarity of thought" that had led him to the decision.

"Twenty years I can do, 23 years I can't," he said.

Revealing he had always wanted to be education minister, he said he had thoroughly enjoyed his roles in defence and earlier as the foreign minister.

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Mr Smith paid tribute to new Deputy PM Anthony Albanese, calling him a hero of the party, and previous deputy Wayne Swan.

He said Mr Swan had always had a crystal clear understanding of the role of unions and Labor to help vulnerable people.

Mr Smith also thanked Families Minister Jenny Macklin and former Communications Minister Stephen Conroy, who he said was "misunderstood by many".

But Senator Conroy was the "bravest member of the parliament I know", with raw courage and raw decency, he said.

Prime Minister Kevin Rudd said "Smithy" was a Labor institution and he had delivered an "elegant and humane conclusion" to that.

Mr Rudd revealed what he was one of the best jokes of Cabinet, talking Mr Smith's love of tidy paperwork.

When you really wanted to get under his skin, you would mess with his impeccably placed papers, Mr Rudd said "We love you for that because you are even more anally retentive than I am," he said.

Julia Gillard and Wayne Swan approached Mr Smith to congratulate him after Deputy Prime Minister Anthony Albanese finished a speech thanking his good friend.

Ms Gillard gave her former colleague a hug before Mr Swan shook his hand.

They then left the chamber.

The Opposition's Julia Bishop also approached Mr Smith for a pat on the back and kiss.

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