Axed Treasurer Joe Hockey will quit politics amid speculation he will be offered a plum diplomatic post within weeks.
In a statement issued on Sunday afternoon, Mr Hockey, who will be replaced as Treasurer by Social Services Minister Scott Morrison, announced he was retiring from Parliament after nearly two decades.
"I advised the Prime Minister that I did not wish to continue as a minister in the government and that it is my intention to resign from the House of Representatives," he said.
"I will have more to say in due course, but for the sake of my young family - to whom I owe so much - I have decided to bring my parliamentary career to a close."
It is not uncommon for former senior ministers to be appointed ambassadors in key posts such as Washington, London or European capitals.
Prime Minister Malcolm Turnbull strongly hinted the government may give Mr Hockey such a job, saying he believed the Treasurer had more service to give to Australia.
"Joe has made a long and distinguished contribution to our nation's government and Parliament over many, many years for which I thank him," Mr Turnbull said. "I believe he has a further contribution to make in our nation's service."
Former Labor leader Kim Beazley is due to finish as Ambassador to Washington at the end of this year. Mr Beazley has been a highly respected diplomat, having excellent connections in the US capital.
Fairfax Media understands an announcement that Mr Hockey will replace Mr Beazley could occur within weeks.
The current NSW Liberal Party president, Trent Zimmerman is the front runner to replace Mr Hockey in the seat of North Sydney, with the moderate faction claiming a strong hold on the numbers in local branches.
No date has been set for a byelection yet but insiders were not ruling out a factional battle over the preselection, with predictions the Right faction would resist Mr Zimmerman taking the plum seat.
Mr Zimmerman is a long time mover and shaker in the so called 'wet' faction of the Liberals both in state executive and behind the scenes. He has worked for Mr Hockey as a staffer and is currently a senior policy adviser at the lobby group, Tourism and Transport Forum (TTF). He is openly gay and is the current state president of the party.
Other potential moderate candidates are Suresh Manickam, a former staffer to enator Marise Payne and current chief executive of industry group, the National Electrical and Communications Association.
On the right, John Ruddock, who is backed by hard right MLC, David Clark, is seen as a possible candidate. Tim James, a staff member for NSW minister, Anthony Roberts was also mentioned through he is believed to be eying the state seat, currently held by Jillian Skinner.
While the seat of North Sydney is ostensibly a blue ribbon Liberal seat, encompassing the suburbs of Cremorne, North Sydney, Kirribilli, Artarmon, Hunters Hill and Lane Cove, it has shown that it can deliver some unexpected results. It has elected Independents to state and federal seats in the past and for several decades, the municipality of North Sydney has had independent mayors. Ted Mack was the independent state member for North Shore for 12 years before contesting the federal seat of North Sydney in 1990 and winning two terms at the expense of the Liberal Party.
The seat has also seen a strong rise in its Green vote over the years with the Greens securing 15 per cent of the primary vote, just behind Labor at 20 per cent in 2013. Mr Hockey cruised to victory with 61 per cent of the primary vote and 66 per cent two party preferred.
Genia McCaffery, the long time independent mayor of North Sydney ruled out a tilt at Canberra on Sunday.
