His decision creates an open seat in a state that has recently trended Republican, The Washington Post reported.
"After months of consideration, I have decided not to seek re-election in 2012," Conrad told his constituents in a letter. "There are serious challenges facing our state and nation, like a $14 trillion debt and America's dependence on foreign oil. It is more important I spend my time and energy trying to solve these problems than to be distracted by a campaign for reelection."
Conrad, who served as state tax commissioner before running for the Senate, is known as a thoughtful and intellectual lawmaker with special expertise in budget issues. He currently chairs the Senate budget committee.
President Obama released a statement calling Conrad "a tireless advocate for the people of North Dakota."
"During that time, he has shown an unmatched dedication to putting our country on a sound fiscal path and a commitment to meeting our nation's energy challenges," Obama said. "He has also been a good friend to me, and while I am saddened to see him leave the Senate, I look forward to working with him during the next two years on the important issues facing our country."