Former Federal Opposition leader Brendan Nelson has announced he will not be contesting the next election.

Dr Nelson took over the Coalition leadership after the 2007 election loss, but was dumped for Malcolm Turnbull in a leadership spill in September last year.

Last night he told a Liberal Party function in Sydney that he will stand down from his seat of Bradfield at the next election.

Dr Nelson told Sky News he thought long and hard about his decision to quit politics.

"I've spent a lot of time thinking about it and talking to my wife about it," he said.

"One thing I'll never be is some sort of seat warmer."

Dr Nelson says he is not intending to try to make a move to state or local politics.

"I have had my opportunities and I've had great opportunities bestowed on me by my party and by my electorate and by Australia, and it's time now for someone else to have a go," he said.

He thought it was appropriate to announce his resignation from parliament well before the next election.

"It has been an enormous honour to serve Australia through what is now 13 years in the parliament, but I think it is hard to know when it's time to go," he said.

"I think the time has come, it's time for renewal and I thought it was appropriate to announce this now rather than leave it further into the electoral cycle."

Dr Nelson's announcement follows Monday's Coalition frontbench reshuffle.

Opposition frontbencher Julie Bishop stepped down as treasury spokeswoman but will keep her job as deputy opposition leader and take up the foreign affairs portfolio, previously held by Senator Helen Coonan.

Joe Hockey will head up the treasury portfolio, with Senator Coonan taking up Mr Hockey's former role in the finance portfolio.

Frontbencher Christopher Pyne will now take the role of manager of Opposition business from Mr Hockey.

Dr Nelson was the education minister in the Howard government between 2001 and 2006 and defence minister from 2006 until the election loss a year later.