Kirk, the city's first black mayor, will join a crowded field expected to seek the Democratic nomination in Texas for Sen. Phil Gramm, R-Texas, seat. Attorney General John Cornyn has already announced he will seek the Republican nomination for the post.
Kirk told supporters at City Hall that being mayor was "the greatest honor" of his political career.
"Serving you as mayor has been a dream come true for me and for my family," he said. "Together we have been able to make our dreams come true for our city. We have done what we said we were going to do."
Since his election, Kirk said the city council has ended the divisive politics of the past and embraced a new attitude that has brought new accomplishments, including the $246 million Trinity River development, American Airlines Center and Victory downtown development.
Kirk, a 46-year-old attorney, expressed interest in the Senate race even before Gramm announced his retirement in September. He quickly formed an exploratory committee after the Gramm's announcement and in recent weeks has been traveling the state.
More than 100 prominent government, civic and business leaders, including three former Texas governors, were named to the committee. Among them was former Democratic Gov. Ann Richards, who appointed Kirk secretary of state during her administration in Austin.
"As mayor of Dallas, I've had an extraordinary opportunity to make a difference at the local level," Kirk said at the time. "I am excited about the opportunity to serve all Texans and I will work hard to bring people together, to get things done, and do what's right."
Kirk is expected to officially launch his senate bid in a few days.
Kirk was elected mayor in 1995 and re-elected in 1999 with 74 percent the vote but he could not seek a third term. He is a partner in the Dallas law firm of Gardere, Wynne and Sewell.
Others expected to seek the Democratic senate nomination include former Texas attorney general Dan Morales, Austin attorney Ed Cunningham, former Senate candidate Victor Morales, and Rep. Ken Bentsen, D-Texas, a nephew of former Sen. Lloyd Bentsen.