Federal Newcastle MP Sharon Grierson has announced she will retire at the next election.

Ms Grierson said she's retiring due to family and personal reasons.

"As I have explained to the electorate my aged parents are confronting mesothelioma - an asbestos related cancer - and my children would benefit from more of my attention," she said.

"They have given me their selfless support. It is time for me to repay their sacrifice."

"This has been a difficult decision. There is no greater privilege or honour than to represent the people of this great city in the Australian Parliament."

She said she has the understanding and support of Prime Minister Julia Gillard.

"I look forward to continuing to work with the people of Newcastle over the next year and thank them for their ongoing support," she said.