Labor Deputy Leader Tanya Plibersek has decided against contesting the party's leadership ballot, citing family reasons.
Despite having the support of outgoing leader Bill Shorten and former prime minister Julia Gillard reportedly backing her, Ms Plibersek decided not to run.
"Now is not my time," she said in a statement on Monday afternoon.
"At this point, I cannot reconcile the important responsibilities I have to my family with the additional responsibilities of the Labor leadership.
"I know some people will be disappointed with this decision."
Mr Shorten announced he would stand down during his concession speech to allow a new person to rebuild the party in the wake of Labor's shock election loss.
Senior Labor MP Anthony Albanese has already confirmed he will be a contender in the ballot, while Chris Bowen is also considering a tilt.
Mr Shorten, who will remain as interim leader until the new leader is confirmed, called a meeting of the party's national executive for Monday, signalling the start of the process to select a new leader.
Mr Albanese said on Sunday that he was the best person to rebuild Labor in the wake of the "devastating" election result.
Mr Albanese, who lost to Mr Shorten in the party's last leadership ballot in 2013, promised a review of what went wrong for Labor, but did not want to dwell on the "devastating result".
The 56-year-old son of a single mother who was raised in public housing in Sydney has been one of the more progressive voices in the Labor Party and has the backing of the party's left faction.
