Many union and Labor Party figures were "blindsided" by ACTU president Ged Kearney's decision to give up on a long-running aspiration to enter federal politics for a tilt at the Victorian state seat of Brunswick.

The announcement surprised many in the labour movement who struggled to name a clear front-runner to replace Ms Kearney, who lives in the state electorate. She will stay on in the president's job until July next year before contesting the state election in November, if she wins preselection.

ACTU president Ged Kearney. Credit:Louise Kennerley

One senior union movement source said: "This news has really taken us by surprise", while another union leader said "we were just blindsided by it".

Public service union leader Nadine Flood's name was among those floated as a candidate for the potential vacancy in the ACTU president's job. It has been traditionally filled by ALP left-wing aligned representatives of big public sector unions.