Federal Parliament's lower house has voted to install Labor MP Anna Burke as the new Speaker, following the resignation of Peter Slipper last night.

Mr Slipper announced he was standing down just hours after a bill to have him removed from the position was narrowly defeated in Question Time.

The Opposition had been demanding Mr Slipper step down over offensive text messages, but their motion was voted down 70 votes to 69.

A short time later Mr Slipper took the Speaker's chair for the final time to say he was honoured to have been chosen, but recent events meant he was unable to continue in the role.

"It's a wonderful privilege to serve in a Parliament and of course the interests of the Parliament are seriously more important than the interests of any of us, and I respect this Parliament too much to not put aside my personal interests," he said.

"The importance of the House is... far more important than my future."

Holding back tears, Mr Slipper reflected on the changes he tried to make as Speaker and thanked MPs on both sides of Parliament who have supported his reforms.

"I regret that recent proceedings have prevented me from continuing with these reforms," he said.

"I'd also like to thank the staff of my office who've worked so hard, particularly in recent months."

Later on Tuesday night Ms Burke - who has been acting in the role - was elected as the new Speaker of the House of Representatives.

Mr Slipper is facing a sexual harassment claim from his former staffer James Ashby.

On Monday court documents revealed text messages sent between Mr Slipper and Mr Ashby, in which the Speaker used offensive language to describe female genitalia.

On Tuesday afternoon he apologised for the messages, saying they were meant to be private, and many of them occurred before he became Speaker.

But he says nothing excuses their content and he can understand why people - particularly women - would be offended.

In his resignation speech, Mr Slipper praised both Opposition Leader Tony Abbott and Prime Minister Julia Gillard.

"I look at the Leader of the Opposition who's been a friend of mine for a very long time, he came to my wedding," he said.

"I don't hold anything against the Leader of the Opposition who I think is a person of fine character and I think we're privileged to have a lady of the amazing stamina that we have as Prime Minister.

"I leave this position without rancour, with a great deal of sadness and more importantly with a great deal of regret because I believe given the controversy that's occurred in recent times that's it's within the interests of the Parliament that I take this course of action."

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 8 minutes 9 seconds 8 m Peter Slipper resigns on what has has been an extraordinary day in Parliament

Not over yet

Mr Slipper says he looks forward to being vindicated of the claims currently against him.

He also says he intends to continue as the independent member for the Queensland seat of Fisher.

"I thank colleagues on both sides for their friendship - either present or past," he said.

"Perhaps once I have left the sometimes solitary office of Speaker I will get to know them better as the independent member for Fisher."

Ms Gillard says her thoughts are with Mr Slipper's family.

"Whatever else anyone may want to say about the member I think at a human level each of us would wish the best for him and his family at what is a distressing and very pressurised time," she said.

"We would all recognise that there's a group of human beings well beyond this place who are feeling some pain."

Mr Abbott says Mr Slipper has shown "good judgement" by resigning.

"Tonight I have to say that we all feel for him as a human being. He's obviously been through a very difficult period," he said.

"We think that he has done the right and honourable thing by resigning from his high office."

Leader of the House Anthony Albanese has told 7:30 it was widely agreed that Mr Slipper was a very good Speaker.

But he says Mr Slipper recognised that the scandal surrounding him was damaging the Parliament.

"The relentless negativity of Tony Abbott and the Opposition was going to continue and that I think brings down the standing of the Parliament as a whole," he said.

"I spoke to Mr Slipper this afternoon. I've had a couple of discussions with him about timing and about the processes et cetera.

"It was a decision for him that he came to and him alone."

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 8 minutes 50 seconds 8 m Anthony Albanese says Peter Slipper's decision is courageous

Anna Burke, who now becomes the third Speaker for this Parliament, says she is honoured to be appointed to the role.

"I am truly speechless at this time. I am deeply honoured and moved by this incredible honour that the House has bestowed upon me," she said.

"I hope I will serve this House with pride as the only second female Speaker of the House."

She also thanked Mr Slipper and praised him for his work as Speaker.

"To the Member for Fisher I also want to extend my thanks for his delightful remarks about me today but also for the gracious way he stood aside this afternoon," she said.

The Lower House later voted 74 to 70 to install Nationals MP Bruce Scott as the new Deputy Speaker.

The Opposition's attempt to have Mr Slipper removed as Speaker sparked a blistering and personal debate over accusations of sexism during Tuesday's Question Time.

Mr Abbott called for a vote to immediately sack the Speaker, following the revelations he used offensive language to describe female genitalia.

But Ms Gillard fired back with a blistering attack on Mr Abbott, accusing him of "repulsive double standards".