Governor-General Sir Peter Cosgrove will retire when his five-year term finishes next year, saying the job "deserves and demands new vigour".

Labor leader Bill Shorten has called on the government to extend Sir Peter's tenure, but the former defence force chief says he will step down at the end of March.

"That's when my five years is up. It's not fixed, but if you do the job properly, at the end of five years you're probably running out of puff a bit ... after five years, the job deserves and demands new vigour," he told The Australian on Wednesday.