SENATOR Nick Minchin has resigned from the shadow cabinet and has confirmed he will not contest this year's election.

The Liberal powerbroker today confirmed he will not seek pre-selection for the South Australian Liberal Senate ticket and intends to leave parliament when his Senate term expires on June 30 next year, the Herald Sun reports.

The Liberals will elect a new Senate leader when parliament resumes in seven weeks, while Opposition Leader Tony Abbott will be forced to reshuffle his frontbench as a result of Senator Minchin's decision.

Senator Minchin said he had been contemplating retirement since the Coalition lost the 2007 election, but the decision had been difficult.

He said recent family events had helped him make up his mind.

Senator Minchin’s 19-year-old son Oliver, a Defence cadet, was involved in an accident during a training exercise last month when he was thrown from a boat and run over by the propeller causing severe injuries.

"Having served nearly 17 years in the Senate, and having worked in the Party’s professional arm for 14 years before that, I consider it is now time to bring my political career to a conclusion," he said.

The decision is a a blow for Mr Abbott as Senator Minchin is a key supporter and helped bring down former leader Malcolm Turnbull and bring Mr Abbott to the Liberal leadership over the emissions trading debate.

It will also be a big setback for the Opposition as Senator Minchin was a long-time minister in the Howard Government and served in a range of senior roles, including Finance Minister.