Labor senator Sam Dastyari has said he will not return to the Senate next year, amid questions over his links to China.

Key points: Sam Dastyari has been under sustained pressure from Government and within Labor to resign

Sam Dastyari has been under sustained pressure from Government and within Labor to resign Allegations of links to Chinese Government have piled up over the last year

Allegations of links to Chinese Government have piled up over the last year He says his "ongoing presence detracts from the pursuit of Labor's mission" so will not return

"Today, after much reflection, I've decided that the best service I can render to the federal parliamentary Labor Party is to not return to the Senate in 2018," he told reporters at a media conference in Sydney on Tuesday.

"I've been guided by my Labor values, which tell me that I should leave if my ongoing presence detracts from the pursuit of Labor's mission.

"It is evident to me we are at that point, so I will spare the party any further distraction."

Senator Dastyari has been under pressure to resign since allegations of misconduct first surfaced more than a year ago, when it was revealed he allowed a company owned by Chinese billionaire Huang Xiangmo to pay a legal bill for his office.

He stepped down from Labor's frontbench over those revelations, saying accepting the donation was "within the rules but it was wrong", but further links were exposed this year.

Fairfax reported last month that Senator Dastyari warned Mr Huang Xiangmo that his phone was probably being tapped by US agencies in a secret face to face meeting between the pair last October.

Reports also emerged that he had made comments at a Chinese media conference about the South China Sea that went against ALP policy.

Labor leader Bill Shorten dumped Senator Dastyari from his position as deputy Senate whip as well as a Senate committee chair and last week the Government called for him to be brought before the powerful privileges committee to further explain himself.

Most recently, a Fairfax report alleged that Senator Dastyari had pressured Tanya Plibersek, who was Labor's foreign affairs spokeswoman at the time, not to meet a Chinese political activist in a visit to Hong Kong.

Dastyari could keep senator's salary for six weeks

It is not yet clear exactly when Senator Dastyari will resign from the Senate.

The wording of his announcement was that he would "not return to the Senate in 2018", which leaves open the possibility he would continue being paid for more than six weeks.

He will be entitled to his senator's salary until his resignation is official.

The ABC understands there is a possibility he could be leaving the option open for Kristina Keneally to step into his spot if she loses to John Alexander in the Bennelong by-election this weekend.

Earlier on Tuesday, Ms Keneally said she had been offered Labor Senate seats in the past and turned them down.

"I am here running as the candidate for Bennelong, I have been offered only one thing and that is as candidate for Bennelong," she said.

Dastyari made 'right decision' in stepping down: Shorten

Senator Dastyari's party leader Bill Shorten spoke shortly after the announcement, saying he agreed that resigning from the Senate was the "right decision".

"There's no doubt in my mind he's a good, decent, loyal Australian," Mr Shorten told a media conference in Bennelong.

"He's exhibited very poor judgement and he's now paying the heaviest of prices."

The Labor leader would not reveal whether or not he asked Senator Dastyari to step down.

"I won't go into all my discussions but for the record, ultimately this was his decision and I support and commend his decision," Mr Shorten said.

Mr Shorten said Senator Dastyari should be proud of his achievements in the Senate.

"He without a doubt has been one of the instigators of a banking royal commission," Mr Shorten said.

"He speaks up for multicultural Australia and Australians from diverse backgrounds and he has been in the front of calling out Pauline Hanson's One Nation Party racism."

Labor colleagues Jim Chalmers and Joel Fitzgibbon tweeted shortly after Senator Dastyari's announcement, saying his service to the Parliament should not be forgotten.

Mr Chalmers said Senator Dastyari had "[shone] a light on multinational tax avoidance, banking scandals and unfairness and injustice in our society which should trouble us all".

Professor Joseph Cheng Yu-Shek, the Hong Kong academic whom Senator Dastyari allegedly urged Ms Plibersek not to meet, spoke to the ABC after the Labor senator's resignation.

He said his discussions with Ms Plibersek were about how the pro-democracy movement in Hong Kong perceived the political situation at the time, and that the Chinese Government likely perceived his criticisms of it as "dangerous to the stability of the regime".

"Beijing normally sees this as a kind of unfriendly act for a Western politician or political leaders to meet pro-democracy activists in Hong Kong. [It sees these meetings as] interferences in China's domestic affairs," he said.

"So this kind of pressure exerting on Western politicians are not at all surprising from our point of view.

"Beijing will always try to persuade these politicians to be friends of China, to act in the interests of good relations between China and the countries concerned, and so on."