Rick Perry has announced that he will not stand for re-election as governor of Texas, paving the way for a possibly unencumbered run at the White House in 2016.

Perry, who replaced George W Bush in 2000, is the longest-serving governor in Texan history. But Perry said in an emotional speech Monday that he has opted against seeking a fourth four-year term in 2014.

"The book of Ecclesiastes teaches us, for everything there is a season," he said. "The time has come to pass on the mantle of leadership. Today I am announcing I will not seek re-election as governor of Texas. I will spend the next 18 months working to create more jobs, opportunities and innovation. I will actively lead this great state. And I'll also pray and reflect and work to determine my own future path."

Despite a promising start, Perry dropped out of the race to become the 2012 Republican presidential nominee after he was ridiculed following a disastrous debate performance. He has not gone public with his future plans, only saying on Monday that his "focus will remain on Texas". However, he will be seeking a new challenge next year and could be tempted to try for the presidency again without the distraction of having to govern the nation's second-largest state.

Perry, 63, spoke at a televised address in San Antonio at the largest Caterpillar equipment dealership in the country. It is run by Peter Holt, the owner of the San Antonio Spurs basketball team and one of Perry's biggest backers.

The venue allowed Perry to trumpet one of his favourite themes, job creation. He claimed in an advertisement that Texas has created 33% of the country's net new jobs in the past decade, citing the state's low tax rates and limited regulation as key economic drivers.

"The best way to fund education and healthcare is through job creation, not higher taxation. Texas works. Texas works. The jobs prove it, the revenue picture proves it, the number of people moving here proves it. Texas works because we have less government, less taxes," he said today.

However, 17% of Texans lived below the poverty level between 2007 and 2011, according to census data – nearly 3% above the national average.

Perry began his political career as a Democrat in 1984, switching parties in 1989. His social conservative credentials have made him popular with far-right Republicans. Last month he travelled to Connecticut and New York in a bid to woo gun manufacturers to Texas. He has presided over more executions than any other US governor in the modern era. A staunch Christian, last May he said he was "greatly disappointed" with the Boy Scouts of America's decision to admit gay members.

Perry was briefly a frontrunner for the Republican presidential nomination that ultimately went to Mitt Romney, but struggled in debates and his campaign imploded after his "oops" moment in November 2011 when he forgot the name of one of three federal agencies he wanted to eliminate. Perry blamed fatigue from recent back surgery for his poor public performances.

The controversy over proposed abortion legislation in Texas has pushed Perry and his brand of politics back into the national spotlight. Wendy Davis, a Democrat state senator, became an overnight star two weeks ago for a near-eleven-hour filibuster designed to scupper a bill that would severely restrict access to abortions and ban them after 20 weeks.

The measures failed to become law but Perry recalled the Texas Senate for a special session so that the Republican majority would have another chance to pass the bill. That is expected to happen this week. "Texans want to protect life," Perry told Fox News on Sunday, decrying protests in the public gallery that delayed the original vote as "mob rule". He told cheering supporters today that he is determined to pass the bill, via "additional sessions if required", and that "Texas is and will remain a strong pro-life, pro-family, pro-freedom state."

Davis's stand galvanised the pro-choice movement and led to speculation that she could try for the governorship in 2014. Inspired by dreams of mobilising the state's growing Hispanic population, Democrats have long-term ambitions to "turn Texas blue". But the prospects of any Democrat succeeding Perry next year appear slim.

Texas's gubernatorial elections will take place in November 2014. Perry's decision to step aside clears the path for Greg Abbott, the Texas attorney general, who has a reported $18m in campaign funds and is expected to launch a bid for the office.

Perry has remained non-committal about another tilt for the presidency. It is "an option out there", he told Fox News yesterday. If Perry decides to run again, he may face stiff competition in the Republican primaries from within Texas in the shape of Ted Cruz, the outspoken first-year US senator. Cruz is considered a rising star among Tea Party supporters and a potential outside bet for 2016.

Perry "certainly has a tremendous amount of ground to catch up," Mark Jones, professor and chair of the Department of Political Science at Rice University in Houston, told the Guardian in regards to the governor's chances of receiving a Republican White House nod.

"He's a long-shot candidate but he's also a skilled campaigner. He could win by losing: running a credible race as a form of political redemption."

Jones said that Perry will be remembered for successfully packaging a low-tax, limited style of government. "He has taken a Texas model of economics, politics and society and effectively branded it in a way that had not been done before.... placing it as an alternative to the Obama model, the blue state model of places like California, Illinois and New York."

He added that Perry would probably have won again in 2014, despite recent negative opinion polls, but that the governor probably recognised that after such a long tenure it is time to move on. "It's a deflator for Democrats because he was someone they could have more easily campaigned against," Jones said. "Abbott is more of a blank slate."