Former South Australian Liberal leader Martin Hamilton-Smith is quitting his ministry in the Labor Government and has said he will not recontest the state election on March 17.

"After long consideration over the Christmas-new year break, I have decided that 21 years of public service, in what was my third career, has been fulfilling and that now is the time to move on," he said.

Mr Hamilton-Smith quit the Liberals to help Labor shore up its narrow fourth-term majority in State Parliament and was rewarded with ministries covering trade, defence, small business and veterans' affairs.

Mr Hamilton-Smith said he would now be doing all he could to help the candidate from Nick Xenophon's SA Best party, Graham Davies, win his vacated seat of Waite in March.

"I think ...Waite is best served by a Xenophon candidate stepping up," he said.

Mr Hamilton-Smith was elected to Parliament in 1997 and said that, as MP for Waite, he had taken a similar path to one of his predecessors in the southern Adelaide seat.

Long-serving Robin Millhouse also switched his political allegiances during the years he served until 1982, and Mr Hamilton-Smith said his own career had involved putting "his service to the people ahead of party politics".

"Mr Millhouse was an enigmatic representative when the seat was known as Mitcham," he said.

"When he saw failures in the [Liberal] party, he took the bold decision to continue as the member but under another banner [Liberal Movement and then Australian Democrats].

"I am proud to say that I've been able to deliver excellent outcomes for the seat as an independent [Liberal]."

Cabinet size to be reduced

Premier Jay Weatherill said the former Liberal would be standing down from Cabinet after its first meeting of the year, on January 18, and he would personally be taking over the portfolios until the election.

"Martin Hamilton-Smith has made an outstanding contribution to South Australia during his four years in Cabinet," the Premier said.

"He decided to quit the Liberal Party and join a Labor Cabinet because he wanted to make a difference — and that's exactly what he's done."

Mr Weatherill said the retiring MP had been a tireless champion for SA small businesses and war veterans.

Liberal Sam Duluk, who is the MP in the seat of Davenport, will contest Waite at the state election, while Labor has yet to announce its candidate.

Liberal Opposition Leader Steven Marshall said Mr Hamilton-Smith had "correctly read the tea leaves" about his prospects of retaining Waite had he stayed in politics.

He said he was not worried about the retiring MP backing the SA Best candidate.

"I don't think he's going to have much influence in that electorate," he said.

"The choice is very stark ... you've got a choice of more Labor — the people that created the problems — a lot of stunts from Nick Xenophon or a real solution for this state offered by the Liberal Party."