In a statement posted on his official Web site, Nelson, 70, told the people of his state it has been an honor to serve them in the U.S. Senate and as their governor.
"During this time we've accomplished a great deal," he said. "As governor, I helped our state experience unprecedented economic growth, cut taxes and left state government with a surplus.
"As your senator, we've opened new markets for our agricultural and manufacturing products; expanded the use of ethanol; secured STRATCOM's [Nebraska-headquartered U.S. Strategic Command's] future; built new veterans' clinics, a soon-to-be veterans' hospital in Omaha, and research facilities at our universities; and kept taxes low."
He said much work remains to be done but he wants to spend more time with his family and find other ways to be of service.
"Simply put: It is time to move on," he said.
He used his announcement to make a plug for bipartisanship in Congress.
"Public office is a place for public service, not personal profit," he said. "It's about promoting the common good, not the agenda of the radical right or the radical left. It's about fairness for all, not privileges for the few. And, it's about protecting the rights of individuals, even if it angers the majority."
The departure of Nelson -- a conservative Democrat in a heavily Republican state who would have faced a tough campaign if he had chosen to pursue another term -- could help tilt the balance in the Senate, now narrowly held by the Democrats, back toward the Republicans' favor.
The Republican field includes state Attorney General Jon Bruning, state Sen. Deb Fischer and state Treasurer Don Stenberg. Republican Nebraska Gov. Dave Heineman has said he has received encouragement to enter the race as well.
The potential field of Democratic candidates is thin, the Washington publication said, with former Sen. Bob Kerrey, who gave up the seat rather than seek re-election in 2000, saying it is "highly unlikely" he will run.
President Barack Obama, on vacation in Hawaii, issued a statement thanking Nelson for his years of service.
"Over the course of his career, Ben's commitment to working with both Democrats and Republicans across a broad range of issues is a trait far too often overlooked in today's politics," Obama said. "Michelle and I commend Ben for his service, and wish him and his family well in the future."