The announcement came a month after Graham dropped his bid for the Democratic presidential nomination.
"I have had a full and joyful and I hope productive life, and I intend to have other chapters that will meet those same standards," Graham said during a speech at Lincoln High School in Tallahassee, with his wife and daughter at his side.
CNN said Graham's departure another blow to Democratic hopes of reclaiming control of the closely divided Senate next year.
Graham, who will be 67 Sunday, said he plans to write, teach and possibly create a center to train young political leaders in Florida.
CNN noted that Graham and three other Senate Democrats from the South -- John Edwards of North Carolina, Zell Miller of Georgia and Ernest Hollings of South Carolina -- have all decided to leave next year, forcing the party to defend four open seats in a region that is becoming increasingly Republican.