Influential South Australian senator Nick Xenophon has outlined his succession plan and formally resigned from Federal Parliament, naming senior adviser Rex Patrick as the man to take his place in the Senate.

Key points: Patrick, a former submariner, has a close working relationship with Xenophon and defence expertise

Patrick, a former submariner, has a close working relationship with Xenophon and defence expertise Expected to be endorsed at special sitting of SA Parliament as early as this Thursday

Expected to be endorsed at special sitting of SA Parliament as early as this Thursday NXT will be renamed SA-BEST (Federal), but Xenophon will remain the party's leader

The party that bears its founder's name, the Nick Xenophon Team, will also be renamed as SA-BEST (Federal) — but he will keep hold of the reins of his Canberra team from Adelaide.

Mr Xenophon held on to his Senate seat in Federal Parliament amid the Citizenship Seven saga, one of only two of the politicians not to be kicked out because of their dual citizenship at the last election.

The outcome of the High Court case was almost inconsequential for the South Australian, who sent shockwaves through federal and state politics when he declared he was running in the electorate of Hartley at next year's South Australian election.

Mr Patrick, a former submariner, had been widely tipped as one of the frontrunners to replace his boss given their close working relationship and his expertise in the defence sector.

"Given Rex's deep understanding and involvement in key issues I have worked on, his appointment to the Senate will ensure a seamless transition," Senator Xenophon said in a statement.

Nick Xenophon is readying his party for his departure from federal politics. ( ABC News: Jed Cooper )

Mr Patrick has to be formally endorsed to replace Mr Xenophon by a special sitting of the South Australian Parliament

That could happen as early as this Thursday. The next SA Parliament sitting week runs from November 14-16, the same time senators are due back in Canberra.

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Last year, he was named by Fairfax media as the source of a massive leak of information from a French shipbuilder awarded the contract for Australia's next fleet of submarines.

Since the crossbencher's surprising announcement he would return to state politics, where his career started 20 years ago, Mr Xenophon had been hit with many questions on how the party would be managed in his absence.

He has now confirmed that he will remain the party's federal leader, even though his name will no longer be in its title.

"With SA-BEST fielding candidates at the March 2018 state election, the name change also reflects the synergy and close working relationship between the state and federal entities," he said.

"This strengthens our ability to deliver real and practical solutions for the many challenges facing SA, with state and federal MPs working together to ensure SA's interests are never compromised."

Mr Patrick will join party colleagues Stirling Griff and Skye Kakoschke-Moore in the Senate, and the party's only Lower House MP Rebekha Sharkie in Federal Parliament.

His predecessor formally resigned from the Senate this afternoon.

"It has been an enormous honour and privilege to serve South Australians in the Senate," Mr Xenophon wrote to Senate president Stephen Parry.

"I hope to be able to continue that service in a different forum in the near future."

Some opinion polls suggested Mr Xenophon's return to South Australian politics effectively makes next year's state poll a three-horse race between the incumbent Labor Party (which has been in power since 2002), the Liberal Opposition and his SA-BEST team.

Mr Xenophon has brushed off suggestions he could become state premier after the vote, rather promising to take a balance-of-power role in the new parliament.

Senior Liberals at a state and federal level have criticised his decision to contest the election, describing it as something of an ego trip.