The retirement of former Victorian Labor minister Tim Holding will force a by-election in the safe Labor seat of Lyndhurst, but the Liberals are unlikely to contest it.
Mr Holding announced his retirement from politics today, becoming the third former Labor minister to retire in just over a year.
Mr Holding said it was time to opt out of public life.
"I've been in public life almost continuously for more than 20 years, I've given everything that I have to serving in public life," he told reporters.
"I believe the time has now come for me to do other things with my life."
The decision will force a by-election in Lyndhurst, southeast of Melbourne, held by Labor by a margin of 13.9 per cent.
A date has not yet been set.
The Liberal Party has not determined whether it will run a candidate but it is unlikely given the margin and the fact it has not run candidates in recent by-elections following the retirements of former Labor ministers Bronwyn Pike and Rob Hulls last year.
Opposition Leader Daniel Andrews said a special meeting of caucus would be held next week to decide Mr Holding's replacement.
"Tim has made a significant contribution to Victoria and has much to be proud of," he said.
Mr Holding, who was the shadow treasurer and opposition industry spokesman, served for eight years as a minister in several portfolios under the Bracks and Brumby Labor government.
He said he had not sought nor been offered another job and ruled out a tilt at federal politics.
He said he believed Labor's prospects at the next election are very good.
"I had to make a decision now as to whether I had it in me to serve as a minister for the full four years in the next term of government, when I believe Labor will be returned to office," he said.
"If I didn't have it in me, then I had to say so now, it was the fair thing to do for my colleagues to give them a chance to select the team they'll take to the next election."
Mr Holding said he was proud to count among his legacy water-saving projects including the $5.7 billion desalination plant, the cost of which has been heavily criticised by the Coalition government.
"We will use the water from this plant in years ahead and when we do, this water will save the people of Melbourne," he said.
Premier Ted Baillieu pointed to the desalination plan as Mr Holding's "great contribution" to Victoria.
Liberal Party state director Damien Mantach said the party will announce soon its intentions regarding the by-election.
"This is the eighth Labor-initiated state by-election in six years. The Liberal Party has not initiated one by-election during this time."