John Key wants his deputy Bill English to be the next prime minister of New Zealand.

He made that clear after his shock announcement on Monday that he's stepping down and National's caucus will elect a new leader on December 12.

Mr English says he wants to talk to the party's MPs and his family before announcing a decision, although Mr Key told him in September that he was going to step down.

Mr Key's endorsement makes Mr English firm favourite but he could still face a challenge from Police Minister Judith Collins.

Mr Key informed the country of his decision just days after celebrating eight years in the top job and a decade as leader of the National Party.

He will officially tender his resignation to Governor-General Dame Patsy Reddy on December 12 after the new leader has been elected.

He will remain in parliament as an MP into next year to avoid a by-election.

"Simply put, it has been for me the most remarkable, satisfying and exciting time of my life," he said.

"But, despite the amazing career I've had in politics, I've never seen myself as a career politician."

Mr Key said he was choosing to stand down because he wasn't able to look the public in the eye through an election campaign and commit to serving a full fourth term.

"More than anything else in my time here I've tried to be straight and true with New Zealanders. I also believe that leadership changes for the right reasons and handled well is good for a political party," he said.

Mr Key said he would leave the top job forever grateful for the public support and for that of his family, who sacrificed a lot for his career.

A decade in the spotlight meant many nights alone for his wife Bronagh and an "extraordinary level of intrusion and pressure" for his children Stephie and Max.

Mr Key believes whoever succeeds him will be able to lead the party to a fourth term victory at next year's general election, and the possibility of a fifth.

"But it needs a refresh and we're starting that refresh today," he said.

He suggested next Monday's caucus meeting could be a contest for both the Prime Minister and Deputy Prime Minister positions, with Mr English seeking the leadership.

"I've worked with Bill for 10 years, we've been an amazing leadership team, we've had a great working relationship and to me it would feel a bit odd if I wasn't backing the guy I stood alongside for a decade," he said.

"If I didn't think he was right to be Prime Minister then I shouldn't have thought he was right to be the deputy, and I do."

His career highlights have included supporting Christchurch through the rebuild, overhauling justice agencies, trade liberalisation and advancing race relations.

As for regrets he said he wished the flag referendum had succeeded and while he's disappointed the Trans-Pacific Partnership and Kermadec Ocean Sanctuary deals weren't completed says there is still time.

Mr Key said he could die happy with how he served the nation, but hoped that would be a long time to come.

He has no firm plans for the future, but would be interested in serving on boards internationally and in New Zealand, as well as taking up foreign speaking opportunities.