Israel's Defence Minister Ehud Barak on Monday announced he was quitting political life after a decades-long career that also saw him serve as prime minister.

Barak, 70, made the surprise announcement at a press conference in Tel Aviv, adding that he would retire from politics after a new government is formed in the wake of January elections.

"I have decided to resign from political life and not participate in the upcoming Knesset elections," Barak said.

"I will finish my duties as defence minister with the formation of the next government in three months," he added, saying that he wanted to spend more time with his family.

Barak's announcement came as political observers had speculated the long-time politician would announce he was joining another political party ahead of the January 22 elections.

Many suspected he might pair up with former foreign minister Tzipi Livni to run on a centrist ticket, after she quit the centre-right Kadima party following her loss in a primary vote.

But few believed that Barak would announce he was quitting political life altogether, in a decision that caps a tumultuous year for him.

In January, he resigned from the Labour party where he had spent his entire political life, leading his newly-formed Independence faction into the government of Prime Minister Benjamin Netanyahu.

He had taken the Labour party into the coalition against the wishes of many of its members, who objected to the hawkish bent of Netanyahu's government.