Linda Burney, Brendan O'Connor to retire from politics as Albanese ...

Linda Burney, the Minister for Indigenous Australians and first Aboriginal woman in the lower house, will retire from politics at the next election.

Skills and Training Minister Brendan O'Connor, who also sits in cabinet, will join Ms Burney to retire at the end of this term of government.

The pair will step down from their positions as ministers immediately, prompting a ministry refresh.

Announcing their retirements, Prime Minister Anthony Albanese said he was proud to call Ms Burney and Mr O'Connor his friends.

"I am proud to have witnessed first-hand their passion for this nation, their determination to leave this country better," he said.

Labor will call for nominations to its frontbench, and Mr Albanese expects to announce his new ministry on Sunday, when they will be sworn in.

Ms Burney has represented the Sydney seat of Barton since 2016, when she became the first Indigenous woman elected to the House of Representatives, and later the first Indigenous woman to serve as Indigenous Australians minister. 

Mr Albanese paid tribute to Ms Burney as a humble and selfless leader.

"Everyone who meets Linda Burney shares in the joy of her company and the light of that wonderful smile," he said.

"The discrimination, hardship and loss she had to overcome in her life is more than most of us can comprehend. Linda was born into an Australia where she was treated as a second-class citizen. And indeed was not recognised. 

"Yet her life is a record of profound firsts."

Minister for Indigenous Australians Linda Burney.(ABC News: Adam Kennedy)

Previously Ms Burney was also the first Aboriginal person to be elected to the NSW parliament, where she served for more than a decade.

As minister, Ms Burney oversaw the unsuccessful referendum to establish an Indigenous Voice to Parliament.

She described its defeat as "a day of sadness" but "not the end of reconciliation".

Mr Albanese said despite that setback, she has continued to advocate for the lives of First Nations people.

An emotional Linda Burney said it was time for her to pass on the baton.

"My entire life has always been about service, and I believe I have a valuable contribution to make outside parliament in the future," Ms Burney said.

"I have been through more than my fair share of life's ups and downs, but I think I have done it with kindness, grace, resilience, intelligence and integrity.

"Of course, the Voice referendum ... didn't deliver the outcome we had hoped, but I think history will treat it kindly. But I know in my heart, I gave all that I could to close the gap and to advance reconciliation.

"I was the first Indigenous person elected to the New South Wales parliament, the first Indigenous woman in the House of Representatives, the first Indigenous woman to be appointed by this wonderful man [Anthony Albanese] to cabinet— but I won't be the last. To me, that is progress."

Mr O'Connor thanked his daughter as he announced his retirement, who had been "resilient" in the years since the death of his wife and her mother Jodi in 2018.

But he said "it really is about time" for him to leave so he could spend more time with his family.

"These are great jobs … but they're not the greatest exemplars for balancing work and family, I have to say," Mr O'Connor said.

Skills and Training Minister Brendan O'Connor is retiring from politics.(ABC News: Che Chorley)

Mr O'Connor, who has been in parliament since 2001 and represents the seat of Gorton, also held ministries under former prime ministers Kevin Rudd and Julia Gillard.

The outgoing minister expressed pride at news from his department that half a million Australians had received fee-free TAFE placements since the federal election under his reforms, "well exceeding the election commitment we made".

Mr Albanese said "you won't find a more decent human being" than Mr O'Connor.

"We met when we were less grey back in young Labor, almost four decades ago, and in that time we have stood side by side," he said.

Mr O'Connor and Ms Burney both thanked their electorates and the Labor Party, to whom Mr O'Connor said they were indebted.

Mr Albanese said their retirements offered a chance to refresh his ministry, and promote new talent.