Liberal senator Simon Birmingham to retire from politics at the next ...

Opposition Senate leader Simon Birmingham will retire from politics and not seek re-election next year, after almost two decades in parliament.

Senator Birmingham, who is one of the Liberal's most senior moderates, serves as shadow foreign minister and as the Coalition's leader in the Senate.

He said on Thursday that he will now step in a "new, commercially orientated direction", but added that his new role would have nothing to do with lobbying, government relations or commentary. 

"It is always better to go when there are some wishing you to stay," he said in an emotional valedictory speech in the upper house.

"Now is the right time for me, my family and for new career pathways."

His message to his colleagues focused on the importance of respect, telling the chamber that "it is not necessary to target one another and personalise debates to advance the issues important to you". 

"Every senator is afforded with remarkable privileges and a platform like no other in this nation to advance those issues important to you," he said.

"Use those privileges to make the most of your platform and you will be amazed at what you can achieve without crossing the line."

Senator Birmingham was first elected to represent South Australia in 2007 and has served as minister for education, trade, and finance under previous Coalition governments.

He was appointed to cabinet under former prime minister Tony Abbott and held high-profile ministry positions in the Turnbull and Morrison governments.

As trade minister, Senator Birmingham endured China's imposition of tariffs on several Australian products as the nation was put in a diplomatic deep freeze. 

He also commenced trade agreements with the United Kingdom and landed the world's largest agreement with 13 other regional partner countries.

Speaking in the Senate, he recalled the beginnings of the COVID pandemic, when a meeting was called and the decision to close Australia's borders to China was made.

"This was a decision of such consequences to the stakeholders I represented. I challenged the health advice but could also see the wisdom in the decision being taken. It was the first of many monumental decisions," he said.

Senator Birmingham and Opposition Leader Peter Dutton in the Senate chamber on Thursday. (AAP: Mick Tsikas)

Senator Birmingham went on to serve as finance minister during the pandemic, presiding with former treasurer Josh Frydenberg over several budgets that helped to keep unemployment at record lows.

As a leading moderate within the Liberals, he has taken a more progressive stance on social issues, supporting same-sex marriage and taking a back seat on the Coalition's campaign against the Indigenous Voice to Parliament, which he did not campaign against.

On Thursday, he said he was proud of the "small role in securing marriage equality" as one of the first Coalition MPs to back the reform and called for reconciliation with Aboriginal and Torres Strait Islander peoples.

"We should strive to make Australians proud of having the oldest continuously living culture in the world, not ashamed due to disadvantage nor resentful due to perception of special treatment," he said. 

Since entering opposition, Senator Birmingham has been responsible for foreign affairs, and in that role has strongly advocated for Australia to stand in lock-step with Israel through the conflict in Gaza and for Australia to strengthen its response to Russia's invasion of Ukraine.

The government's leader in the Senate, Penny Wong, paid tribute to her counterpart in a speech in which she praised his "commitment to rise above petty, personal politics".

She said Senator Birmingham had shown her "great kindness" at times, including after Labor's 2019 election loss.

"Simon Birmingham has always engaged respectfully, he has always engaged with integrity and he has always engaged with a clear view for achieving something positive for our country," Senator Wong said.

"In politics, you see a lot of people where there's a lot more spin than substance.

"While some might say in this building that's the norm, with Senator Birmingham, there's a lot more substance than spin."

In a brief statement in the lower house, Opposition Leader Peter Dutton thanked Senator Birmingham for his service. 

"Birmo has a young family and I know he's going to look forward to spending more time with them," he said said.

"He's given an enormous amount to our country."

Prime Minister Anthony Albanese said Senator Birmingham was respected across the parliament, and was a person of "integrity".

"It is understandable he has made this decision but I wish him all the very best," Mr Albanese said in the chamber.