Labor will have gender-balanced leadership after right-wing factional heavyweight Don Farrell abandoned his bid to be Penny Wong's Senate deputy.

Key points: Don Farrell steps aside to make way for a woman to replace him in Labor's leadership

Don Farrell steps aside to make way for a woman to replace him in Labor's leadership Labor's Caucus will elect its Upper and Lower House leadership today

Labor's Caucus will elect its Upper and Lower House leadership today Kristina Keneally is the frontrunner to join Labor's four-person leadership team

New leader Anthony Albanese said Senator Farrell came to him on Thursday morning to confirm he would not seek to continue in the role he has held for the last three years.

"Even though he had substantial support of Caucus colleagues, [Senator Farrell] was prepared to step aside as Labor's deputy leader in the Senate on the basis that he understood that I had made it clear that my view was there needed to be gender balance in Labor's leadership team," the Opposition Leader said.

Don Farrell stepped aside. ( ABC News )

The party officially endorsed Mr Albanese's leadership today, with Victorian MP Richard Marles his deputy.

Kristina Keneally appears the likely frontrunner to become Senator Wong's deputy.

She sits in Labor's right faction along with Mr Marles, while Mr Albanese and Senator Wong are both in the left.

Senator Keneally's bid for the frontbench only became possible when fellow NSW right MP Ed Husic relinquished his seat on the frontbench to make way for the former NSW premier.

Kristina Keneally is a frontrunner to be Labor's deputy leader in the Senate. ( ABC News: Andrew Kennedy )

"Ed Husic is one of my best mates in this place. He has taken a decision voluntarily without anyone talking to him," Mr Albanese said.

"He had a look at what was going on and made a decision to step back in the short term from the shadow ministry.

"He will have an important role to play in any party that I'm the leader of and, if I am successful in government, I will want Ed Husic at the most senior levels of our party."

Ed Husic stepped down from Labor's frontbench for Kristina Keneally. ( ABC News: Matt Roberts )

Former leader Bill Shorten will remain on Labor's frontbench, in a role Mr Albanese will announce in the coming days.

"I understand that there are lessons to be learned from defeat," Mr Shorten told Labor's Caucus meeting.

"Rather than commentators' snap judgments or hindsight masquerading as insight, it is important that we take our time to reflect.

"But obviously we were up against corporate leviathans — a financial behemoth — spending unprecedented hundreds of millions of dollars [on] advertising, telling lies [and] spreading fear.

"They got what they wanted."

Mr Shorten's former deputy, Tanya Plibersek, will also continue in the shadow cabinet but not in one of the top four leadership roles that she has held for the last six years.

Ms Plibersek considered running for Labor leader but ultimately opted against it.

Mr Shorten promised to make Senator Pat Dodson, the man dubbed the "Father of Recognition", his Indigenous Affairs minister if Labor won the election.

Bill Shorten wanted Pat Dodson as his Indigenous Affairs minister if Labor won the election. ( ABC News: Nick Haggarty )

But he will not hold that portfolio in Opposition, Mr Albanese confirmed today.

"Patrick Dodson didn't put himself forward as a candidate for the frontbench," the Opposition Leader said.

Liberal Ken Wyatt yesterday became the first Aboriginal person to sit in the Cabinet when he became the first Aboriginal man to hold the Indigenous Affairs portfolio.

The left and right factions pick their representatives and the leader assigns portfolios. Mr Albanese is expected to announce the roles people will hold in his ministry on Sunday or Monday next week.

The right faction's frontbench will be largely unchanged, besides Senator Keneally and West Australian MP Matt Keogh both gaining promotions.

ACT senator Katy Gallagher, from the left faction, returns to the shadow ministry thanks to her re-election. She had lost her seat in the Parliament in the dual citizenship saga.

Queensland senator Murray Watts and Lower House MPs Andrew Giles and Pat Conroy will gain left faction promotions.

Unaligned ACT MP Andrew Leigh lost his spot on Labor's frontbench.