Veteran Labor senator John Faulkner is bringing forward his retirement from Parliament and intends to formally submit his resignation in late January.

He had already announced he would not recontest the next election, due in 2017.

But Senator Faulkner, who is 60 years old, has decided to leave earlier, which will create a casual vacancy in the Upper House.

"It's over and it's time to go," he told a press conference at Parliament House.

He said he was resigning from political life and would not pursue any positions within the Australian Labor Party, but he would attend local branch meetings.

"I do intend to remain an active Labor Party member." he said.

"Although I won't be a delegate to the party's national conference, you will find me attending branch meetings and supporting Labor candidates in local, state and federal elections.

"As a rank and file member, I will continue to be a strong advocate for party reform."

He said he had decided to leave early because it was time for "a new generation to step up" in the party.

ALP national president Jenny McAlister has been endorsed to take the Senate spot.

Shorten pays tribute to 'lion of the Senate'

"On behalf of a grateful Labor Party, on behalf of millions of Australians who have appreciated his hard work, a lion of the Senate has chosen to retire," Labor leader Bill Shorten said.

"He goes with the best wishes and gratitude of the Labor Party, the Labor movement and I care to believe Australians of all political views because of husband distinguished service over two-and-a-half decades."

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Senator Faulkner said he hoped he could do "something worthwhile" post politics, but said he had no plans and no job offers on the table and would not join many of his former colleagues in writing a book about his experiences.

"I think there are enough books on the book shelves at the moment," he said.

He has been a senator since 1989, and served as minister for Defence, Environment and as special minister of state.

In Opposition, particularly during the Howard years, he also became known for piercing questions at Senate estimates committees.

Within the Labor Party, he has played a key party elder role and been an advisor to leaders, including former prime minister Julia Gillard.

He nominated John Curtin as the greatest Labor leader.

A casual vacancy in the Senate is one which arises mid-term and is usually filled by the same party, with approval from that state's parliament.