Mr Griffin, who has been on the frontbench for more than a decade in both opposition and government, including more than five years in veterans affairs, has informed the prime minster he is keen to step back.

The MP for Bruce, a seat in Melbourne's eastern suburbs, made up his mind over the past two weeks while the government was in caretaker mode.

His departure opens up a space in the outer ministry, giving Ms Gillard the opportunity to promote somebody new.

The parliamentary secretary for disability services, Bill Shorten, is expected to be promoted to the junior ministry.

Mr Shorten helped engineer the ousting of former prime minister Kevin Rudd and a promotion to cabinet would be seen as Ms Gillard rewarding the plotters, something she promised would not happen.

Ms Gillard said she would announce her new ministry early next week.

Phillip Coorey is the chief political correspondent for The Sydney Morning Herald.